Tax Return Problem
(Forms available at: http://www.irs.gov/formspubs/ )
Directions: Prepare 2015 federal
income tax return, including all necessary schedules and attachments, for Barack
and Michelle Obama using the following information:
Social Security Numbers: Barack-
123-45-6789, Michelle –333-222-111
Daughters –Malia and Natasha – ages 14 and 11, respectively-SS# 555-77-6666
and 555-77-6667. Michelle paid $6,000 in child care expenses for each child while
she worked.
Salary: Barack – $45,000, Michelle – $20,000
Malia and Natasha
– $400 each
Interest from Mellon Bank – $3,000,
Interest on Illinois municipal bonds – $1,800
Dividends on IBM stock – 6,000
Sold 1,000 shares of AOL
stock for $7,000 on January 15, 2013.
Shares were purchased on January 15, 1999 for $3,000.
Michelle had the following
operating results from providing legal services, which she operated as a sole
proprietorship:
Sales income – $12,000
Office supplies – 6,000
Advertising Expenses – 1,000
Business clothing – 2,000
Barack and Michelle rented
out the old family home in Chicago for the entire year:
Rental income – $15,000, Mortgage interest – $7,000
Depreciation –
The house was purchased in 12/01/13 at a cost of $200,000 and is depreciated on
a straight line basis over 27.5 years. Accumulated
Depreciation from prior years was $7,576.
Mortgage interest on the
white house owned by Barack and lived in by family – $5,000
Real Estate taxes on the
white house – $3,000;
State income taxes withheld
fromBarack’s wages – $4,000
Federal income taxes withheld
fromBarack’s wages – $6,000
District of Columbia sales
tax paid by Barackwas $1,700.
State income tax refund of 2014 overpayment received
in 2015 – $2,000 (2014 state income taxes were fully deductible on the 2014 tax
return.)
Barackhad $8,000 of business
travel expenses, which were paid by his employer.
Michelle paid $5,000 in
college tuition for graduate school and $400 for eyeglasses.
Barack contributed $3,000 to
the United Way, and $4,000 to Harvard University during the year.
Michelle paid $4,000 of
student loan interest.
Notes
1.Please make up
any non-financial information needed to complete the tax return that is not
provided above.
2. Use 2014 IRS tax return forms where 2015 form
are not yet available.
