Comprehensive Problem One Noah and Joan Arc’s Tax Return Noah and Joan Arc live with their family in Dayton, OH. Noah’s Social Security number is 434-11-3311. Noah was born on February 22, 1986 and Joan was born on July 1, 1987. Both enjoy good health and eyesight. Noah owns and operates a pet store and Joan is a firefighter for the city of Dayton. The Arcs have two children, a son named Shem (Social Security number 598-01-2345), born on March 21, 2014, and a daughter named Nora (Social Security number 554-33-2411), born on December 3, 2017. Joan and Noah brought a folder of tax documents located. Noah’s pet store is located at 1415 S. Patterson Blvd, Dayton, OH 45409. The name of the store is “The Arc” and its taxpayer identification number is 95-9876556. Since you handle Noah’s bookkeeping, you have printed the income statement from your Quickbooks software. Details of The Arc’s meals and entertainment: Travel costs are business related and do not include meals. Noah and Joan paid the following amounts during the year (all by check): Political contributions $ 250 Church donations (for which a written acknowledgment was received) 5,000 Real estate taxes on their home 2,350 Medical co-pays for doctor visits 700 Mortgage interest for purchase of home See Form 1098 Tax return preparation fees 350 Credit card interest 220 Automobile insurance premiums 600 Uniforms for Joan 125 Contribution to Noah’s individual retirement account (made on April 1, 2022) 4,000 Noah has a long-term capital loss carryover from last year of $2,322. Noah and Joan own a condo and use it as a rental property. The condo is located at 16 Oakwood Ave, Unit A, Dayton, OH 45409. Noah provides the management services for the rental including selection of tenants, maintenance, repairs, rent collection, and other services as needed. On average, Noah spends about 2 hours per week on the rental activity. The revenue and expenses for the year are as follows: Rental income $16,100 Insurance 800 Interest expense 5,750 Property taxes 1,200 Miscellaneous expenses 500 The home was acquired for $83,000 in 2005. On May 12, 2021, the Arcs installed new fixtures (7-year recovery period) at a cost of $3,400. They wish to maximize the cost recovery on the new fixtures but make no elections. The Arcs paid Ohio general sales tax of $1,076 during the year. The Arcs received a $5,600 Economic Impact Payment (EIP) and $3,300 of advance child tax credit payments in 2021. Required: You are to prepare the Arcs’ federal income tax return in good form, signing the return as the preparer. Do not complete an Ohio state income tax return. Make realistic assumptions about any missing data that you may need. The following forms and schedules are required:

Comprehensive Problem One Noah and Joan Arc’s Tax Return Noah and Joan Arc live with their family in Dayton, OH. Noah’s Social Security number is 434-11-3311. Noah was born on February 22, 1986 and Joan was born on July 1, 1987. Both enjoy good health and eyesight. Noah owns and operates a pet store and Joan is a firefighter for the city of Dayton. The Arcs have two children, a son named Shem (Social Security number 598-01-2345), born on March 21, 2014, and a daughter named Nora (Social Security number 554-33-2411), born on December 3, 2017. Joan and Noah brought a folder of tax documents located. Noah’s pet store is located at 1415 S. Patterson Blvd, Dayton, OH 45409. The name of the store is “The Arc” and its taxpayer identification number is 95-9876556. Since you handle Noah’s bookkeeping, you have printed the income statement from your Quickbooks software. Details of The Arc’s meals and entertainment: Travel costs are business related and do not include meals. Noah and Joan paid the following amounts during the year (all by check): Political contributions $ 250 Church donations (for which a written acknowledgment was received) 5,000 Real estate taxes on their home 2,350 Medical co-pays for doctor visits 700 Mortgage interest for purchase of home See Form 1098 Tax return preparation fees 350 Credit card interest 220 Automobile insurance premiums 600 Uniforms for Joan 125 Contribution to Noah’s individual retirement account (made on April 1, 2022) 4,000 Noah has a long-term capital loss carryover from last year of $2,322. Noah and Joan own a condo and use it as a rental property. The condo is located at 16 Oakwood Ave, Unit A, Dayton, OH 45409. Noah provides the management services for the rental including selection of tenants, maintenance, repairs, rent collection, and other services as needed. On average, Noah spends about 2 hours per week on the rental activity. The revenue and expenses for the year are as follows: Rental income $16,100 Insurance 800 Interest expense 5,750 Property taxes 1,200 Miscellaneous expenses 500 The home was acquired for $83,000 in 2005. On May 12, 2021, the Arcs installed new fixtures (7-year recovery period) at a cost of $3,400. They wish to maximize the cost recovery on the new fixtures but make no elections. The Arcs paid Ohio general sales tax of $1,076 during the year. The Arcs received a $5,600 Economic Impact Payment (EIP) and $3,300 of advance child tax credit payments in 2021. Required: You are to prepare the Arcs’ federal income tax return in good form, signing the return as the preparer. Do not complete an Ohio state income tax return. Make realistic assumptions about any missing data that you may need. The following forms and schedules are required:

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter13: Tax Credits And Payment Procedures

Section: Chapter Questions

Problem 45CP

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