Determine all items that will be deducted before the AGI calculation. In a MS Ex

Question

Determine all items that will be deducted before the AGI calculation. In a MS Excel spreadsheet, list all deductible items in column A. In column B, determine where that deduction should appear on Form 1040 (for tax year 2017).

Taxpayer Information

            Name:   Bryan Jones

            Address:   1200 Main St.

                            Green Bay, Wisconsin 12345

            DOB:   5/6/1976

            Filing Status: Single

            SSN: 500-10-2000

            Occupation: Staff Accountant

INCOME INFORMATION:

Wages and Compensation

The following information is taken from Bryan Jone’s 2017 Form W-2 Wage and Tax Statement:

                                   

Box 1 – Wages, tips, and other compensation

52,000

Box 2 – Federal Withholding

8,750

Box 17 – State Income Tax Withholding

1,000

Interest and Dividends

Bryan has some Certificates of Deposits are Main Street bank which yielded 3,750 in interest in

            2017. In addition, Bryan has interest income from municipal bonds in the amount of 1,250.

Also, Bryan received $2100 in qualified dividends from Plum Electronic Co.

Profit/Loss from Business

Bryan has a part-time accounting services business. In 2017, his income and expenses are as f    follows:

                                                Service Revenue          7,000

                                                Office Expense                  500

                                                Advertising                       750

Capital Gains

Bryan had the following stock transactions in 2017:

He sold 1,000 shares of Apex Co. for $ 12,000 on June 7, 2016, which he purchased on April 1, 2014 for 25,000. In addition, he sold 750 shares of Velocity Inc. for $10,000 on September 1, 2016, which he purchased on December 1, 2015 for $5,000.

Rental Real Estate

Bryan owns a rent house which he purchased on July 1, 2014. The income and expenses of the rental real estate unit for 2017 are as follows:

Rental income                          $12,000

                        Property taxes                         $1,500

                        Depreciation                          $1,000

                        Repairs and Maintenance             $750

                        Insurance                                 $2,000

Other Transactions in 2017

1. Bryan received a gift of $4,000 from his brother.

2. Bryan paid $3,000 for the year in alimony to his ex-wife, per divorce decree.

3. Bryan had gambling winnings of $1,000.

4. Bryan was the beneficiary of his mother’s life insurance policy.

His mother died in 2017 and he received $50,000 under this policy.

Box 1 – Wages, tips, and other compensation

52,000

Box 2 – Federal Withholding

8,750

Box 17 – State Income Tax Withholding

1,000

Explanation / Answer

Below are deductions for AGI

Particulars Amount Comment Form 1040 Office expense              500 Schedule C expense Line 12 Advertising              750 Schedule C expense Line 12 Basis of Apex co 1000 shares        25,000 Form 8949 Line 13 Basis of 750 shares of Velocity           5,000 Form 8949 Line 13 Rental real estate- Property taxes           1,500 Schedule E Line 17 Rental real estate- Depreciation           1,000 Schedule E Line 17 Rental real estate- Repairs              750 Schedule E Line 17 Rental real estate- Insurance           2,000 Schedule E Line 17 Alimony           3,000 Form 1040 for AGI deduction Line 31a

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