TAX RETURN QUESTION) Robert A. Kliesh, age 41, is single and hasno dependents. Roberts Social Security number is 111-11-1111. Hisaddress is 201 Front Street, Missoula, MT 59812. He isindependently wealthy as a result of having inherited sizableholdings in real estate and corporate stocks and bonds. Robert is aminister at First Presbyterian Church, but he accepts no salaryfrom the church. However, he does reside in the churches parsonagefree of charge. The fair rental value of the parsonage is $3,000 amonth. The church also provides him with a cash grocery allowanceof $200 a week. Examination of Roberts financial records providesthe following information for 2015: A) On Jan. 16, 2015, Robertsold 1,000 shares of stock for a loss of $12,000. It was acquired14 months ago for $17,000 and sold for $5,000. On Feb. 15, 2015, hesold 400 shares of stock for a gain of $13,100. That stock wasacquired in 2009 for $6,000 and sold for $19,100. B) He received$30,000 of interest on private activity bonds that he had purchasedin 2013. He also received $40,000 of interest on tax-exempt bondsthat are not private activity bonds. C) He received gross rentincome of $190,000 from an apartment complex he owns. He qualifiesas an active participant in the activity. D) Expenses related tothe apartment complex, which he acquired in 2007, were $225,000. E)Roberts interest income (on CDs) totaled $23,000. Because heinvests only in growth stocks, he has no dividend income. F) He won$60,000 in Montana lottery. G) Robert was the beneficiary of an$800,000 life insurance policy on the life of his Uncle Jake. Hereceived the proceeds in October. H) Robert contributed $5,500 tohis traditional IRA. I) Robert incurred the following potentialitemized deductions from AGI: (1) $5,200 fair market value of stockcontributed to Presbyterian Church (basis of stock was $3,000). Hehad owned the stock for two years. (2) $4,200 interest on consumerpurchases. (3) $3,900 state and local income tax. (4) $15,000medical expenses that he paid on behalf of parishioner who died.(5) $300 for a safe deposit box that is used to store investmentsand related legal documents. (6) $5,000 paid for lottery ticketsassociated with playing the state lottery. Robert contributed$5,000 of his winnings to the church. (7) Because Robert lived inMontana, he had no sales tax. (8) $750 contribution to the campaignof the Democratic candidate for governor. J) Robert made estimatedtax payments of $7,500 K) Robert was covered by health insurancefor the entire tax year. Use Forms 1040 and 6251 and Schedules A,B, D, and E to compute the tax liability (including AMT) for RobertA. Kliesh for 2015. Omit forms 8283, 8582, and 8949. Suggestedsoftware: H&R BLOCK
TAX RETURN QUESTION) Robert A. Kliesh, age 41, is single and hasno dependents. Roberts Social Security number is 111-11-1111. Hisaddress is 201 Front Street, Missoula, MT 59812. He isindependently wealthy as a result of having inherited sizableholdings in real estate and corporate stocks and bonds. Robert is aminister at First Presbyterian Church, but he accepts no salaryfrom the church. However, he does reside in the churches parsonagefree of charge. The fair rental value of the parsonage is $3,000 amonth. The church also provides him with a cash grocery allowanceof $200 a week. Examination of Roberts financial records providesthe following information for 2015: A) On Jan. 16, 2015, Robertsold 1,000 shares of stock for a loss of $12,000. It was acquired14 months ago for $17,000 and sold for $5,000. On Feb. 15, 2015, hesold 400 shares of stock for a gain of $13,100. That stock wasacquired in 2009 for $6,000 and sold for $19,100. B) He received$30,000 of interest on private activity bonds that he had purchasedin 2013. He also received $40,000 of interest on tax-exempt bondsthat are not private activity bonds. C) He received gross rentincome of $190,000 from an apartment complex he owns. He qualifiesas an active participant in the activity. D) Expenses related tothe apartment complex, which he acquired in 2007, were $225,000. E)Roberts interest income (on CDs) totaled $23,000. Because heinvests only in growth stocks, he has no dividend income. F) He won$60,000 in Montana lottery. G) Robert was the beneficiary of an$800,000 life insurance policy on the life of his Uncle Jake. Hereceived the proceeds in October. H) Robert contributed $5,500 tohis traditional IRA. I) Robert incurred the following potentialitemized deductions from AGI: (1) $5,200 fair market value of stockcontributed to Presbyterian Church (basis of stock was $3,000). Hehad owned the stock for two years. (2) $4,200 interest on consumerpurchases. (3) $3,900 state and local income tax. (4) $15,000medical expenses that he paid on behalf of parishioner who died.(5) $300 for a safe deposit box that is used to store investmentsand related legal documents. (6) $5,000 paid for lottery ticketsassociated with playing the state lottery. Robert contributed$5,000 of his winnings to the church. (7) Because Robert lived inMontana, he had no sales tax. (8) $750 contribution to the campaignof the Democratic candidate for governor. J) Robert made estimatedtax payments of $7,500 K) Robert was covered by health insurancefor the entire tax year. Use Forms 1040 and 6251 and Schedules A,B, D, and E to compute the tax liability (including AMT) for RobertA. Kliesh for 2015. Omit forms 8283, 8582, and 8949. Suggestedsoftware: H&R BLOCK
