Colorado State University Tax Filing Schedule & Capital Gains Discussion

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Business Finance

Colorado State University Global Campus


Jenny Walters is a marketing assistant and earned $38,000 in 2018. She is 42 years old and has been divorced for five years. Jenny will claim head of household for 2018. She has a daughter, Julia, who is 20 years old. Julia is a full-time student. Here are some more tax facts:

  1. Jenny's SSN is 123-34-4567 and Julia's is 654-32-1234.
  2. Jenny's address is 100 N. Main St., Atlanta, GA 30301.
  3. Jenny receives $1,200 per month in alimony from her ex-husband.
  4. Jenny owns a rental property with the following financial data:
  1. Rental Revenue - $50,000
  2. Expenses:

Insurance - $5,000

Repairs - $10,500

Depreciation - $4,000

  1. Jenny has interest income from corporate bonds of $2,200 and interest from municipal bonds of $1,000.
  2. Jenny also paid the following expenses: State income taxes of $5,800, charitable contributions of $12,500, and medical expenses of $5,795 for insurance premiums; $1,100 for medical care expenses; $350 for prescription medicine; $100 for nonprescription medicine; and $200 for new contact lenses for Julia.
  3. Jenny received disability insurance payments of $1,200.
  4. Jenny runs a small business from her home giving piano lessons to kids on weekends. She had the following transactions from it: total revenue $10,000; office supplies $500; teaching materials and supplies $1050; concerts and field shows $1500; repairs and maintenance of pianos $950; wages to a teaching assistant $1000; payroll taxes $765; business insurance $420; occupational taxes and license $160.

Prepare Schedule D and Form 8949.

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Explanation & Answer

Attached. Please let me know if you have any questions or need revisions.

A gain or loss from any asset is referred to a capital gain or loss. Capital gains that do not relate to the sale
of business property are reported on Form 8949.The sub totals of form 8949 are recorded on schedule D.
• IRS outlines that almost everything that one owns and uses for investment or personal purposes are taxable.
However, the most common taxable assets are securities, valuable collectibles and real estate. Securities
on the other hand include bonds, stock and options.
• Short term property is property held for less than a year while long term property is property held for more
than a year
FORM 8949
Capital gains or losses are recorded in each transaction
Completing form 8949 requires;
Description of the property
Date acquired and date sold
Amount it was sold
The cost
Schedule D
Has three parts; the short term, long term and summary part.
In the information provided capital assets are:
Rental Property
Corporate bonds
Municipal bonds
Jenney’s home small business
capital assets are classified as either long-term or short term;
Rental property and Jenney’s home small business are long term capital investment.
Bonds are classified according to their maturity. Maturity can be short term (less than 3years) or long term
(more than 10 years).
In this scenario I treated bonds as long term.
The forms are filled in blue

Form 8949
Department of the Treasury
Internal Revenue Service

Sales and Other Dispositions of Capital Assets
▶ Go

to for instructions and the latest information.

▶ File with your Schedule D to list your transactions for lines 1b, 2, 3, 8b, 9, and 10 of Schedule

OMB No. 1545-0074


Sequence No. 12A

Name(s) shown on return
Jenny Walters

Social security number or taxpayer identification number

Before you check Box A, B, or C below, see whether you received any Form(s) 1099-B or substitute statement(s) from your broker. A substitute
statement will have the same information as Form 1099-B. Either will show whether your basis (usually your cost) was reported to the IRS by your
broker and may even tell you which box to check.

Part I

Short-Term. Transactions involving capital assets you held 1 year or less are generally short-term (see
instructions). For long-term transactions, see page 2.
Note: You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was
reported to the IRS and for which no adjustments or codes are required. Enter the totals directly on
Schedule D, line 1a; you aren’t required to report these transactions on Form 8949 (see instructions).

You must check Box A, B, or C below. Check only one box. If more than o...

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