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Prepare a 1040 (schedules A, B, D, Form 3903) - Donna Harp

Please see the attached PDF and assist with final preparation of the 1040 including schedules A, B and D and Form 3903. Please give step by step instructions as to where each transaction is applied in the process of preparing the returns so that I have a better clarification. Also please demonstrate the calculations on the gain on sale of residence for better clarification.

Thank you!

** See ATTACHED PDF for complete description/problem **


Solution Preview

** See the ATTACHED tax return as a .PDF **

There are two pages of worksheets included in the .PDF before you get to the actual forms.

Now for notes about calculations and amounts following the format of the tax return:

Schedule A:
1. The choice between sales tax and income tax was optimized with income tax being the larger amount. Even though she paid more in sales tax, the calculation for a sales tax deduction is based on family size and income level. The program calculated $1449 - less than the income tax paid.
2. Real estate taxes consist of $4100 + 1650 + 3600 = $9350. Her share of ...

Solution Summary

The solution presents a fully prepared tax return in pdf format together with a series of notes to explain the entries, the calculations and the tax law that applies. There are some optional treatments with the data as given.