1040 Sands Case Study Facts: Return Information
Sands Case Study Facts: Introduction
Some data is already entered for you. Use the 1040 Sands Case Study Facts: Data Entry section for instructions and hints on entering any data you are unsure how to enter. You should verify all the information when it has changed or is missing based on the information in these facts.
Basic Taxpayer Information
| Name | Address | SSN | DOB | Employment |
|---|---|---|---|---|
| Charles Sands | 500 North Way Denver, CO 80808 | 777-77-7777 | 04/29/1966 | Consultant |
| Freda Sands | 888-88-8888 | 10/16/1967 | Investor |
Other Basic Information
| Presidential Election Campaign Fund? | No |
| Filing Status | Married, Filing jointly |
| Interest Income | Tax Exempt Interest |
| State of Florida Bonds | $5,000 |
Profit/Loss from Business
| Name | Services by Sands |
| Address | 75 South Way
Denver, CO 80808 |
| Principal profession | Services |
| Business code | 541219 |
| Method of Accounting | Cash method |
| Inventory Valuation | Cost |
| Self-employed health insurance premium |
$ 3,000 |
| Consulting fees income | $50,000 |
| Research expense (Other expenses) |
$ 6,000 |
| Depreciable Asset | Equipment |
| Purchase date | 01/01/2019 |
| Method | MACRS 7-yr. |
| Cost | $10,000 |
Partnerships (Selected Portions of K-1s Shown)
| Plimpton Equipment, Ltd. | Bailor Real Estate Investors | Technology Funding | |
|---|---|---|---|
| Number | 1 | 2 | 3 |
| Partnership ID Number | 94-2904388 | 36-3215399 | 84-1010419 |
| K-1, Line 1 Ordinary income/loss from trade/business | $-8,230 | ||
| K-1, Line 2 Net income (loss) from rental real estate | $-6,790 | ||
| K-1, Line 3 Net income (loss) from other rental income | $ 5,320 | ||
| K-1, Line 5 Interest Income | $ 45 | ||
| K-1, Line 6a Dividend Income | $ 100 | ||
| K-1, Line 7 Royalty Income | $ 500 | ||
| K-1, Line 17 Post-86 Depreciation Adjustment | $ 280 | $ 250 | $ 748 |
| Prior Year Suspended Losses | |||
| Form 4797 (1231) | X | ||
| Operating Losses | X | ||
| Regular Tax | $ 7,860 | $ 5,300 | |
| Alternative Minimum Tax | $ 9,250 | $ 7,980 | |
Medical Expenses
| Hospitals | $10,000 |
| Insurance reimbursement | $ 1,000 |
Timely Quarterly Payments of Estimated Tax Made
| First installment | $3,000 |
| Second installment | $3,000 |
| Third installment | $3,000 |
| Fourth installment | $3,000 |
| Prior year liability | $9,000 |
Charitable Contributions, Noncash
The Sands gave 300 shares of ABC Co., a publicly-traded security, to the Denver Boys Club. The stock was purchased 6/15/1989 for $650. Fair market value (stock quote) at the date of gift (08/08/2019) was $4,200.
Alternative Minimum Taxable Income Adjustments
Charles Sands exercised stock options for 1,000 shares of XYZ Corporation. He had been granted the options as part of an incentive to corporate executives.
Tax adjustment item $28,000
The research expense that was deducted on Schedule C in the full amount of $6,000 must be amortized over 10 years for alternative minimum tax.
The amount deductible for alternative minimum taxable income is $600; the adjustment is $5,400.
Transmittal Letter and Filing Instructions
You wish to generate a combined transmittal letter and filing instructions for this return. The return will be filed with the appropriate IRS center for Colorado residents. In the letter, you want to tell the Sands that you are enclosing the data they furnished for preparing the return.
Case Study Facts/sands_return_info.htm/TY2019
Last Modified: 03/19/2020
Last System Build: 06/17/2021
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