1040 Sands Case Study Facts: Data Entry

Sands Case Study Facts: Introduction

This page is used to provide help when you are not sure where to enter data. You do not need this page if you know where all the information belongs.

Forms are accessed from the Forms List window at the left of the screen. Make sure Organizer is selected.

Taxpayer Information

Select Quick Track > Basic Return Information.

OR

Select General Information > Basic Return Information > Taxpayer Information.
Enter any missing data and review all entries.

State of Florida Bonds

To enter bond information, select Income > Interest Income > Savings/US Bonds/Tax-Exempt/Foreign Int tab.
Scroll to Tax-Exempt Interest.
Enter State Exempt Interest.

The system will add the income back for alternative minimum tax calculations.

Business Information

To enter business information, select Quick Track > Business Income.

OR

Select Income > Business Income > Service by Sands.
Enter the business income and expense items.

K-1 Information

Enter K-1s from all types of entities (1065, 1120S, and 1041) through the Forms List Window:

Select Quick Track > Schedule K-1.

OR

Select Income > Schedule K-1 > activity name > Schedule K-1 Information.
Verify that the Spouse radio button is selected in the Ownership box for each K-1, since Mrs. Sands is the partner. All K-1s are passive.

For multi-activity K-1s, such as a partnership having both ordinary income and rental real estate, treat each activity separately so that income can be coded separately for correct treatment. This is not applicable to this return.
Click the Income tab.
Match each line on the 1065 K-1 with the corresponding 1065 line number on the screen.
Choose the appropriate options for Activity Type and If Rental Real Estate.

Suspended Loss Carryovers

Click the Pass Loss Carryovers tab.
Enter amounts for one partnership.

Medical Expenses

Select Quick Track > Itemized Deductions.

OR

Select Itemized Deductions > Medical and Dental expenses.
Enter $10,000 for medical expenses.
Enter the insurance reimbursement as a positive number. The system will subtract it from the other expenses.

Timely Quarterly Payments

Select Payments and Extensions > Estimated Tax Pmts.
Enter $3,000 for each quarter.
From the Forms List window, select Estimates and Penalties > Underpayment > 2210 Penalty.
Under the Prior Year Information section, verify that the prior year tax liability is $9,000.

Charitable Contribution of Stock

Select Itemized Deductions > Contributions > Noncash Cont.>500 > Add New Organization Name.
Enter Denver Boys Club and click OK.

Only Section A of Form 8283 is required.
Complete the top part of the screen.
Scroll down to enter the rest of the information.
Select the 30% CG OPTION from the AGI Limit drop-down list.
Check the Publicly Traded Security check box.

The date fields are used for print only.

Alternative Minimum Tax

Generally, data entered throughout the system is automatically adjusted for alternative minimum tax and carried to Form 6251. However, the exercise of stock options will not create a transaction for regular tax until the stock is sold. But the adjustment item for alternative minimum tax necessitates recognition in the year of exercise. There is no place on the return that this data could carry from.

Select Taxes > Alternative Minimum Tax > Alt Min Tax.
Identify other similar adjustment and preference items. These are the items that do not include the (Override) indicator.
Enter $28,000 for the incentive stock option adjustment and $5,400 for the adjustment for research expenses.

Transmittal Letter/Filing Instructions

Select Letters and Filing Instructions > General Options.
Generate the letter by selecting Transmittal Letter and Filing Instructions. The system will automatically generate Fresno, CA as the correct IRS Service Center for Colorado.
Verify that the IRS Service Center (Override) is set to Automatic Generation.

Case Study Facts/sands_data_entry.htm/TY2019

Last Modified: 03/19/2020

Last System Build: 06/17/2021