Wendy O'Neil (SSN 412-34-5670), who is single, worked full-time as the director at a local charity. She resides at 1501 Front Street, Highland, AZ 85711. For the year, she had the following reported on her W-2:
Wages$46,200Federal withholding 6,930Social security wages 46,200Social security withholding 2,864Medicare withholding 670State withholding 2,310
Other information follows: 1099-INT New Bank$3001099-DIV Freeze, Inc. Ordinary dividends 400Qualified dividends 400
Wendy had the following itemized deductions: State income tax withholding$2,310State income tax paid with the 2016 return 100Real estate tax 2,600Mortgage interest 8,060
Wendy inherited a beach house in North Carolina (rental only) on January 2, 2017, from her father. The FMV at the father's death was $850,000. He had purchased the house 20 years earlier for $100,000.
Summer rental income $45,000Repairs 2,500Real estate taxes 6,500Utilities 2,400Depreciation(Calculate - ignore land value)
On December 29, 2017, Wendy properly conducted a like-kind exchange for rental real estate located at 128 Lake Blvd., Hot Town, AZ. She received rental property with an FMV of $950,000 and $20,000 cash in exchange for the North Carolina beach house. The Arizona property did not produce any income until 2018.
Prepare Form 1040 for Wendy for 2017. The taxpayer had qualifying health care coverage at all times during the tax year. You will also need Schedule A, Schedule B, Schedule E, Form 4562, and Form 8824.
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