Tax Return Problem Cases ACCT 440 Spring 2016 Instructions: Use the relevant tax forms for your computations. You must download the relevant forms from the IRS website. Do not use tax software to prepare the returns. You need not complete the state tax returns. Make sure to include all the relevant supporting schedules for your federal return. There are a total of five returns assignments. All five returns must be turned in no later than Monday, May 2 at 5:00 p.m. Please turn in the returns in one envelope to room JH 1111. This is an individual assignment. You are not allowed to discuss or share the answers with any other student, friend, tax professional, colleague or a professor. Tax Return 1: Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local chamber of commerce, while Wanda is employed part-time as a paralegal for a law firm. a. During 2014, the deans had the following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda) Interest income -- $101,000 City of Albuquerque general purpose bonds $1,000 Ford Motor Company bonds 1,100 Ally Bank certificate of deposit 400 2,500 Child support payment from John Allen 7,200 Annual gift from parents 26,000 Settlement from Roadrunner Touring Company 90,000 Lottery winnings 600 Federal income tax refund (for tax year 2013) 400 Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda was never issued a form 8332 wavier.) under the divorce decree, John was obligated to pay alimony and child support--the alimony payments were to terminate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. As the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid for her medical expenses (including one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained. The Deans has the following expenditures for 2014: Medical expenses (not covered by insurance) $7,200 Taxes- Property taxes on personal residence $3,600 State of new Mexico income tax (includes amount withheld from wages during 2014) 4,200 7,800 Interest on home mortgage 6,000 Paid church pledge 3,600 Life insurance premiums (policy on Lance’s life) 1,200 Contributions to traditional IRA (on Wanda’s behalf) 5,000 Traffic fines 300 Contributions to the reelection campaign fund of the major of Santa Fe 500 F ...