1:12-56 At the beginning of 2016, Donna Harp was employed as a cinematographer b

Question

1:12-56 At the beginning of 2016, Donna Harp was employed as a cinematographer by Farah Movie, Inc, a motion picture company in Los Angeles, California. In June, she accepted a new job with Ocala Production in Orlando, Florida. Donna is single and her Social Secu- rity number is 000-00-1111. She sold her house in California on August 10 for $500,000. She paid a $14,000 sales commission. The house was acquired on March 23, 1989, for $140,000. The cost of transporting her household goods and personal effects from California to Orlando amounted to $2,350. To travel from California to Florida, she paid travel and lodging costs of S370 and S100 for meals. On July 15, she purchased a house for $270,000 on 1225 Minnie Lane in Orlando. To purchase the house, she incurred a 20-year mortgage for $170,000. To obtain the loan, she paid points of S3,400. The $3,600 of property taxes for the house in Orlando were prorated with $1,950 being apportioned to the seller and $1,650 being apportioned to the buyer. In December of the current year she paid S3,600 for property taxes. Other information related to her return: Salary from Farah Movie, Inc. Salary from Ocala Production, Inc. Federal income taxes withheld by Farah Federal income taxes withheld by Ocala FICA taxes withheld by Farah FICA taxes withheld by Ocala Interest income from Sun National Bank Dividend income (qualifying dividendsl Interest paid for mortgage: 70,000 22,000 5,355 Home in California Home in Orlando Property taxes paid in California Sales taxes paid in California and Florida State income taxes paid in California Determine the amount of recognized gain on the sale of the residen b. Prepare Forms 3903, 8960, and 1040, including Schedules A, B, and D

Explanation / Answer

5. She sold her house in California on August 10 for $500,000. - Sch D line 8d
6. She paid a $14,000 sales commission. - Sch D line 8e
7. The house was acquired on March 23, 1987 - Sch D line 8f adjustment for $250,000 , for $140,000. - - Sch D line 8e
8. The cost of transporting her household goods and personal effects from California to Orlando amounted to $2,350. - form 3903 - correct line 1
9. To travel from California to Florida, she paid travel and lodging costs of $370 and $100 for meals. - form 3903 - correct line 2 (without meal)
10. On July 15, she purchased a house for $270,000 on
11. 1225 Minnie Lane in Orlando.
12. To purchase the house, she incurred a 20-year mortgage for $170,000.
13. To obtain the loan, she paid points of $3,400 - sch A line 12 plus worksheet
14. The $3,600 of property taxes for the house in Orlando was prorated with $1,950 being apportioned to the seller and $1,650 being apportioned to the buyer. - sch A line 6
15. In December of the current year she paid $3,600 for property taxes. - sch a line 6 - correct
16. Other information related to her return:
Salary from Farah Movie, Inc. $30,000 - line 7 1040 - correct
Salary from Ocala Production, Inc. 70,000 - line 7 1040 - correct
Federal income taxes withheld by Farah 6,000 - line 64 1040 - correct
Federal income taxes withheld by Ocala 22,000 - line 64 1040 - correct
FICA taxes withheld by Farah 2,295 - not included
FICA taxes withheld by Ocala 5,355 - not included
Dividend income 10,000 - part 2 sch a - Sch B line 5 (if ordinary) and 1040 line 9a
Interest paid for mortgage:
Home in California 6,780 - sch a line 10 - correct
Home in Orlando 3,800 - sch a line 10 - correct
Property taxes paid in California 4,100 - sch a line 6 - Sch A line 7
Sales taxes paid in California and Florida 3,125 - sch a line 8 - Sch A line 5b
State income taxes paid in California 2,900 - sch a line - Sch A line 5a

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