View the step-by-step solution to:

T044 Q'ehorn. i I {no r' are 6" Reba Dixon is a fth-grade school teacher who earned a salary of $38,000 in 2018. She is 45 years old and has been...

reba dixon_Page_1.jpgreba dixon_Page_2.jpg

Can you reference me to what line these subjects will be put on in 2018 tax return with the draft tax forms. what items are allowable (Inclusions/exclusions/deductions) for 2018 on Reba's return (Either way provide explanations)

reba dixon_Page_1.jpg

T044 Q‘ehorn. fl i I {no r’
are 6”
Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2018. She is 45
years old and has been divorced for four years. She received $500 of alimony payments each
month fiom her former husband (divorced in 2010). Reba also rents out a small apartment
building. This year Reba received $50, 000 of rental payments from tenants and she incurred
$69, 500 of expenses associated with the rental.
Reba and her daughter Heather (20 years old at the end of the year) moved to Louisville
in lanuary of this year. Reba provides more than one—half of Heather 5 support They had been
living in Colorado for the past 15 years, but ever since her divorce, Reba has been wanting to
move back to Kentucky to be closer to her family. Luckily, December 26,2017 a teaching 0:20
position opened up and Reba and Heather decided to make the move. Jan. 15, 2018, Reba sold N0 T '
her Colorado home, where she had been living since her divorce in 2010, for $650, 000. She had
purchased it for $475, 000. She paid a moving company $2, 010 to move their personal
(belongings— and she and Heather spent two days driving the 1, 426 miles to Louisville, Kentucky. N532"
Reba’s mother was so happy to have her home again she gave Reba a gift of $ 1 0, 00 , since she [fit
knew Reba would be incurring a lot of additional expenses. ”3:07;
Reba purchased a home in Louisville. The home cost $375,000 and Reba borrowed
$240,000 to purchase the home. She paid $3,5 0 mortgage interest and $2,700 real estate taxes
on the home in 2018. Heather decided to continue living at home with her mom, but she started
attending school full-time in January at a nearby university. She was awarded a $3,000 partial
tuition scholarship this year covering tuition and fees. Reba helped out by paying the remaining
$2,500 tuition cost and $800 for books and fees. If possible, Reba thought it would be best to
claim the education credit for these expenses. Reba also took 12 hours of continuing education
courses costing $900 to be sure she was current with the material she would be teaching at her
the J CPS job.
Reba wasn't sure if she would have enough items to help her benefit from itemizing on her
tax return. However, she kept track of several expenses this year that she thought might qualify
if she was able to itemize.
State Income Taxes $5,800
Personal Property Taxes on Car
($20 registration fee & remainder Based on FMV of Car) $975
Insurance premiums $5,795
Medical care expenses $1 , 100
Prescription medicine $ 350
Nonprescription medicine 3 100
New contact lenses for Heather 53 200
Cash to United Way $450
Cash to Church $1,200
Cash to Kosair Charities $1,000 Furniture and Clothing to Goodwill
Cost $5,500, FMV 2,500 Shortly after the move, Reba got distracted while driving and she ran into a street sign. The
accident caused $900 in damage to the car and gave her whiplash. Because the repairs were less
than her insurance deductible, she paid the entire cost of the repairs. Reba wasn’t able to work
for two months alter the accident. Fortunately, she received $2,000 from her disability

reba dixon_Page_2.jpg

insurance. Her employer, the Jefferson County Public School District, paid 60% of the
premiums on the policy as a nontaxable fringe benefit and Reba paid the remaining 40% portion.
A few years ago, Reba acquired several investments with her portion of the divorce settlement.
This year she reported the following income from her investments: $2,200 of interest income
from corporate bonds and $1,500 interest income from the City of Denver municipal bonds.
Overall, Reba’s stock portfolio appreciated by $12,000. On July, 15, 2018, Reba sold 20 shares
of her Papa John’s stock for $42 per share after it dropped in value in response to a pubiic
scandal, She had purchased the 20 shares in 2016 for $65.00 per share. On August 8, 2018 she
repurchased 10 shares of the Papa John’s stock .for $44, as it began to increase in price. Heather reported $6,200 of interest income from corporate bonds she received as gifts from her
father Over the last several years. This was Heather’s only source of income for the year. Reba had $10,000 of federal income taxes withheld by her employer. Heather made $1,000 of
estimated tax payments during the year. Reba did not make any estimated payments. Required: Prepare Reba’s Federal tax return for 2018. Either use the forms or indicate which forms
each item would be reported on and also indicate which items are allowable
inclusions/exclusions/deductions for 2018 on Reba’s return (Either way Provide
explanations). Please submit on Moodle by Thursday at 11pm.

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.


Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question