1040 Stuart Case Study Facts: Return Information

Stuart Case Study Facts: Introduction

Some data is already entered for you. Use the 1040 Stuart Case Study Facts: Return Information 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.

Taxpayer Information

Name	Address	SSN	DOB	Employment	Presidential Election Campaign Fund?	Filing Status
Jerry C. Stuart	39 First Street Barstow, CA 94555	739-54-6239	01/01/1986	Salesman/Farmer	No	Married, filing jointly
Shirley A. Stuart	39 First Street Barstow, CA 94555	739-54-9085	03/01/1985	Office Manager	Yes	Married, filing jointly

Dependent Information

Name	SSN	Date of Birth
Stephanie Stuart (Daughter)	642-15-2357	06/01/2015

Child Care Expenses

Child Care Dependent	Child Care Provider	Child Care Provider ID	Amount Paid for Child Care
Stephanie Stuart	KiddieCare 1234 Wonder Way Benecia, CA 98765	94-9999999	$1,450

W-2 Information

	Jerry Stuart		Shirley Stuart
Employer	Computer Salesland	Comco, Inc.	Jan’s Bookbinders
Wages	$16,250	$72,327	$ 8,750
Federal Tax Withheld	$ 2,250	$ 8,712	$ 650
Social Security Tax Withheld	$ 1,008	$ 4,484	$ 543
Medicare Tax Withheld	$ 236	$ 1,049	$ 127
California State Tax Withheld	$ 975	$ 3,349	$ 131

The wages are the same for Social Security and Medicare Wages. You must enter because Jerry’s Social Security and other income causes him to be over the limit. This will make the system calculate based on the long form SE.

Interest Income

The Stuarts received a 1099-INT for interest earned from Farmers Banks for $150.

Profit/Loss from Business

The Stuarts have a retail flower shop in a building on their land called Corner Florist.

Business Information

Business Name	Corner Florist
Business Address	39 First Street Barstow, CA 94555
Business Code	453110
Accounting Method	Cash
Inventory Valuation	Cost
Business Participation	They materially participate in the business. All is at-risk.

Income and Expenses

	Income	Expense
Gross Receipts from Plant Sales	$20,000
Advertising		$ 1,500
Insurance		$ 350
Mortgage Interest Paid		$ 1,250
Office Expenses		$ 250
Supplies		$ 125
Utilities		$ 475

Depreciation - Schedule C

The business has several assets that were purchased in 2017, 2018, and 2019.

* The Laptop has a prior year §179 of $300. Take §179 on the new Cloud Storage.

	Date Placed in Service	Cost	Method	Accumulated Depreciation
Refrigerators	02/01/2017	$ 4,500	Macrs 7Yr	$2,797
Laptop Computer	07/03/2018	$ 700	Macrs 5Yr	$283
Building	01/01/2019	$45,000	Macrs 39Yr
Cloud Document Storage	06/07/2019	$ 600	Macrs 7Yr

Retirement Distributions

Jerry received a 1099-R for his pension plan distribution from Computer Salesland. He received $18,958.

1099-R Box 2b: Taxable amount not determined was checked.
1099-R Box 7: Code 1.
He rolled over the entire amount into an IRA.

Farm Information

Name	Stuart Farm
Agricultural Activity Code	111400
Principal Product	Plants
Accounting Method	Cash

Farm Income and Expenses

	Income	Expense
Sales	$10,000
Chemicals		$ 100
Fertilizer		$ 250
Insurance		$ 1,150
Labor Hired		$ 750
Seeds and Plants		$ 2,000
Supplies		$ 150
Utilities		$ 475

Depreciation Assets

	(A) Farm Equipment	(b) Sprinklers	(C) Greenhouses
Purchase Date	01/01/2017	09/08/2019	06/01/2019
Purchase Price	$5,000	$1,500	$7,000
Method	MACRS 7-year property	MACRS 7-year property	MACRS 7-year property
Accumulated Depreciation at 01/01/2019	$2,814
Sale Date	07/01/2019
Sale Price	$4,100
Special Instructions	Take 6 months depreciation and record this as §1245 gain on Form 4797.	Do not take §179. Enter the cost at full value but show only 45% business use.	Do not take §179. This is 100% business use property.

Miscellaneous Income

State Tax Refund	$ 790
Allocate to 2018 paid	$ 340
Allocate to 2019 paid	$ 450
Itemized deductions for 2018 (Not Limited)	$22,410

Capital Gains and Losses - Carryovers

The Capital Loss Carryover is Long Term (8,000).

Sale of Home

The old home was jointly owned.

Date Acquired	06/13/2012
Basis	$ 152,000
Date Sold	07/02/2019
Sale Price	$ 175,000
Selling Expenses	$ 14,000

Itemized Deductions - Interest Expense

The Stuarts received a 1098 from their mortgage company for mortgage interest.

1098 Issuer	First Mortgage Corporation
Mortgage Interest Amount	$ 12,800
Points on New Home (fully deductible)	$ 1, 500
Real estate tax	$ 2,500

Credits - Child Care

You may have already entered this when you were verifying dependent information. If not, enter it now.

Child Care Dependent	Child Care Provider	Child Care Provider ID	Amount Paid for Child Care
Stephanie Stuart	KiddieCare 1234 Wonder Way Benecia, CA 98765	94-9999999	$1,450

You must enter the amount paid in the Credit Organizer even if you entered it in the Dependent Organizer.

Estimates and Penalties

Estimated Taxes

Override estimated taxes to be equal to $30,000.
Refund any overpayment.

Underpayments

Verify that the 2018 tax liability is $1,000.

Adjustments to Income

Unreimbursed Employee Business Expenses

Affected Filer	Jerry Stuart
Special Treatment	Handicapped Employees
Dues	$ 875
Postage	$ 135
Meals and Entertainment	$ 1,800

Vehicle Information

Car	2019 Cadillac
Date Purchased	04/15/2019
Cost	$ 30,500
Method	MACRS 5yr
Total miles for year	21,750
Business miles	19,575
Gas, oil, and insurance	$ 3,385

Answer all vehicle questions Yes except If employer provided you a vehicle, personal use during off hours is permitted. Answer this question No.

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 Northern California residents. Make sure the return is fully computed before checking the filing center.

Case Study Facts/stuart_return_info.htm/TY2019

Last Modified: 03/19/2020

Last System Build: 06/17/2021