Tax Return Problem-2012 Schnappauf 1040 form

Anonymous
timer Asked: Mar 4th, 2018
account_balance_wallet $100

Question description

The information below will allow you to prepare the 2012 federal tax return for Bill and Joyce Schnappauf. The information is provided in three phases, which correspond to the three major components of computing income tax—gross income, deductions and losses, and property transactions. If your instructor assigns these problems, at the end of each major segment (i.e., Chapter 4, Chapter 8, and Chapter 12), you should complete the appropriate portions of the forms indicated. If you are not using a tax software package, you should not complete the second page of Form 1040 until you have completed Chapter12. Completing the tax return problem will help you understand the reporting procedures for the information in each major segment of the text. In addition, it will aid you in reviewing the major topics discussed in the book; it serves as an overview of the course.

THE SCHNAPPAUF FAMILY

In 2012, Bill and Joyce Schnappauf live in Wakefield, R.I. Bill is 53, and Joyce is 51. Bill is a district sales manager for USC Equipment Corporation, a Rhode Island firm that manufactures and distributes gaming equipment. Joyce is a self-employed author of children’s books. The Schnappaufs have three children, Will, 21, Dan, 19, and Tom, 16. In February 2013, the Schnappaufs provide the following basic information for preparing their 2012 federal income tax return:

1. The Schnappaufs use the cash method of accounting and file their return on a calendar-year basis.

2. Unless otherwise stated, assume that the Schnappaufs want to minimize the cur- rent year’s tax liability. That is, they would like to defer income when possible and take the largest deductions possible, a practice they have followed in the past.

3. Joyce’s Social Security number is 371-42-5207.

4. Bill’s Social Security number is 150-52-0546.

5. Will’s Social Security number is 372-46-2611.

6. Dan’s Social Security number is 377-42-3411.

7. Tom’s Social Security number is 375-49-6511.

8. The Schnappaufs do not have any foreign bank accounts or foreign trusts.

9. Their address is 27 Northup Street, Wakefield, R.I. (02879). 10. The Schnappaufs do not wish to contribute to the presidential election campaign.

PHASE I—CHAPTERS1–4

The first phase of the tax return problem is designed to introduce you to some of the tax forms and the supporting documentation (FormsW-2,1099-INT,etc.) needed to com-plete a basic tax return. The first four chapters focus on the income aspects of individual taxation. Accordingly, this phase of the tax return focuses on the basic income concepts.

1. Bill’s W-2 is provided (ExhibitA-1). The 2012 W-2 includes his salary ($94,000), bonus ($47,000), and income from group-term life insurance coverage in excess of $50,000 ($121.44), and is reduced by his 7 percent contribution ($6,580) to USC’s qualified pension plan. The company matches Bill’s contribution to the plan.

2. The Schnappaufs receive two 1099-INTs for interest (ExhibitsA-2andA-3), two 1099-DIVs for dividends (ExhibitsA-4andA-5), and a combined interest and dividend statement (ExhibitA-6).

3. Joyce and her brother, Bob, are co-owners of, and active participants in, a furniture-restoration business. Joyce owns 30 percent, and Bob owns 70 percent of the business. The business was formed as an S corporation in 2004. During 2012, the company pays $5,000 in dividends. The basis of Joyce’s stock is $27,000.

4. The Schnappaufs receive a 2011 federal income tax refund of $1,342 on May 12, 2012. On May 15, 2012, they receive their income tax refund from the state of Rhode Island. In January 2013, the state mails the Schnappaufs a Form 1099-G (ExhibitA-7). Their total itemized deductions in 2011 were $22,854.

5. During 2012, Joyce is the lucky ninety-third caller to a local radio station and wins $500 in cash and a stereo system. Despite repeated calls to the radio station, she has not received a Form 1099—MISC. In announcing the prize, the radio station host said that the manufacturer’s suggested retail price for the stereo system is $625. However, Joyce has a catalog from Supersonic Electronics that advertises the system for $520.

6. The Schnappaufs receive a Form W-2G (ExhibitA-8) or their winnings at the Yardley Casino in Connecticut.

7. On June 26, 2012, Bill receives a check for $17,400 from the United Insurance Corporation. Though he was unaware of it, he was the designated beneficiary of an insurance policy on the life of his uncle. The policy had a maturity value of $16,980, and the letter from the company stated that his uncle had paid premiums on the policy of $2,950 (ExhibitA-9).

8. Joyce is active in the school PTO. During the year, she receives an award for out-standing service to the organization. She receives a plaque and two $75 gift certificates that were donated to the PTO by local merchants.

9. To complete phase I, you will need Form 1040, Schedule B , and Schedule D.

INSTRUCTIONS:

If you are using tax software to prepare the tax return or are not completing phases II and III of the problem, ignore the instructions that follow. If you are pre-paring the return manually, you cannot complete some of the forms used in phase I until you receive additional information provided in phase II or phase III. Therefore, as a general rule, you should only post the information to the appropriate form and not compute totals for that form. The following specific instructions will assist you in preparing Part I of the return.

a. The only form that can be totaled is Schedule B.

b. Only post the appropriate information to Schedule D. Do not total any columns. More information is provided in phase III of the tax return problem.

c. Do not calculate total income or adjusted gross income on page 1 of Form 1040.

d. Post the appropriate information on page 2 of Form 1040, but do not total this page, compute the federal tax liability, or determine the refund or balance due.

PREPARATIONAID:

Tax forms and instructions can be downloaded from the IRS’s home page (http://www.irs.treas.gov) You can also download IRS Publication 17, which is a useful guide in preparing the tax return.

PHASEII—CHAPTERS 5–8

This is the second phase of the tax return problem you began at the end of Chapter 4. This phase of the tax return incorporates the material from Chapters 5, 6, 7, and 8 by providing you with information concerning the Schnappaufs’ deductions for 2012. They provide you with the following information.

1. Joyce writes children’s books for a variety of publishers. She has been self-employed since 2004. As a freelance writer, Joyce incurs costs associated with preparing a manuscript for which she does not yet have a contract. During the year, Joyce makes 4 business trips, each 3 days long, to meet with various publishers. For shorter trips that are closer to home, she either drives or takes the train and returns the same day. On December 10, 2012, Joyce receives an advance (see below) on her next book. Under the contract, Joyce is scheduled to begin work on the book on February 1, 2013, and must have it completed by November 30, 2013. The Schnappaufs’ home has 2 telephones. Joyce has a separate phone number for her business. The information on Joyce’s business is listed below.

Royalties (ExhibitsA-10 to A-12)

Publisher’s advance $4,500

Office supplies 180

Train tickets 640 Airfare (4 trips) 1,800

Lodging (12 nights) 2,120

Meals (12 days) 510

Telephone ($28 monthly fee per phone line) 672

Internet provider 416

Cellphone, including business calls 876

Business-related postage 108

Printing/copying217

Legal fees1,100

Interest on auto 374

2. On January 2, 2012, Joyce purchases a new car to use in her business. The car, a Volster, costs $15,200. Joyce pays $2,200 in cash and finances the balance through the dealer. She uses the car 40 percent of the time for business and drives a total of 10,500 miles during 2012. The total expenses for the 10,500 miles driven are: repairs and maintenance, $320; insurance, $735; and gasoline, $1,845. The correct depreciation expense for 2012 is $608 ($15,200×40%×10%).

3. Joyce’s office is located in a separate room in the house and occupies 375 square feet. The total square footage of the house is 2,500. The Schnappaufs purchased the home on July 7, 1998, for $70,000. The local practice is to allocate 10 percent of the purchase price to land. The depreciation percentage for the office is 0.02564. When Joyce started her business on January 1, 2004, the fair market value of the house was $108,000. The total household expenses for 2012 are as follows:

Heat $2,170

Insurance 1,425

Electricity690

Repairs to kitchen 2,750

Cleaning1,510

4. Bill began work on his MBA at Denville University. He enrolled in two courses, and paid $2,650 in tuition and $18 for books.

5. Bill and Joyce each contribute the maximum to their respective IRA accounts in 2012. The IRA accoun t is Joyce’s only retirement vehicle. Bill’s basis in his IRA before the current year’s contribution is $26,000, and Joyce’s basis is $36,000. The fair market value of Bill’s IRA on 12/31/12 is $41,720, and the fair market value of Joyce’s IRA is $57,100. In addition, Bill and Joyce contributed $2,000 to a Coverdell Education Savings Account for Thomas.

6. On June 15, 2012, the Schnappaufs’ 2011 station wagon is totaled in Hurricane Ann. The car was purchased for $28,700 in November 2010. The Schnappaufs receive a check for $21,200 from Zippy Insurance Company that represents the fair market value of the car minus a $750 deductible. On June 26, 2012, they replace the car with a 2012 station wagon. The new car costs $31,400, and the Schnappaufs receive a rebate check from the car’s manufacturer for $2,500.

7. The hurricane also damages part of the Schnappaufs’ house. A tree falls and makes a hole in the roof above the kitchen. Water damages the kitchen, causing the new dishwasher to short out, and it has to be replaced. In addition, the linoleum floor has to be replaced. The cost of fixing the hole in the roof is $1,000. The Schnappaufs receive $700 ($1,000 repair cost minus $300 deductible) to fix the roof. Information concerning the dishwasher and the floor is as follows:

DateOriginalFMVFMV

PropertyAcquiredCostBeforeAfterReimbursement

Dishwasher3/30/12$780$780$-0-$380

Floor3/16/12$1,500$1,350$-0-$850

8. The Schnappaufs incur the following medical expenses (before considering the $700 reimbursement they receive from their health insurance policy):

Medical premiums $3,800

Doctors1,200

Chiropractor 650

Dentist 1,900

Vet fees (family dog Sandy) 350

Prescription drugs 340

Over-the-counter drugs (aspirin, cough syrup) 175

In addition, Bill purchases an Exsoaligner machine for$700. The machine was recommended by the chiropractor to help strengthen Bill’s back muscles.

9. The Schnappaufs pay the following property taxes:

Wakefield house $7,700

Family car used by Bill (ad valorem) 480

Joyce’s car (ad valorem)510

10. The Schnappaufs receive two Form 1098s for the cost of interest on bank loans. They also pay interest on their personal credit cards.

Jefferson Trust 1098 (Exhibit A-13—Wakefield house)

Jefferson Trust 1098 (Exhibit A-14—Home equity)

Dempsey’s Department Store revolving account $191

Brooks’ Bargain Basement revolving account 67

Jefferson Trust bank card 212

The proceeds from the home equity loan were used to renovate their kitchen and pay for Tom’s tuition to private school. The interest on the portion of the loan used for private school tuition is $640.

11. Bill and Joyce make cash charitable contributions to the United Fund Campaign ($1,750), Adelade University ($300), Tremon University ($2,000), and Christ the King Church in Kingston, R.I. ($2,600). The Schnappaufs have documentation to verify their cash contributions. They also donate property to the Salvation Army on July 15, 2012:

PropertyFMVOriginal CostDate Acquired

Antique table$515$2251/4/01

Dishwasher 1507005/6/05

Sofa bed16080013/14/07

Men’s suits (2) 140540Various

The Salvation Army acknowledges that theseamounts represent the fair market value of the donated items.

12.The Schnappaufs incur the following expenses:

TypeAmount

2011 tax preparation fee (paid in 2012) $900

Safety deposit box35

Investment journals405

Investment advice 875

Business publications (Bill) 550

Gambling losses 2,640

13. Because Joyce is self-employed, they make federal estimated tax payments of $22 per quarter on April 15, 2012, June 15, 2012, September 15, 2012, and January 15, 2013. They also make estimated payments of $140 per quarter to the state of Rhode Island on April 15, 2012, June 15, 2012, September 15, 2012, and December 31, 2012.

14. Bill and Joyce paid $6,150 in tuition, $625 for books, and $7,630 for room and board for Will, a junior, to attend Springbrook State University. They also paid $15,000 in tuition, $515 in books, and $8,130 in room and board for Dan, a freshman at Prescott College.

15. Other information:

a. Joyce’s business is named Queensbridge Books, and her employer I.D. number is 05-3456345.

b. The Salvation Army’s address is 15 High Street, Wakefield, R.I. 02879.

c. To complete phase II, you will need the following additional forms: Schedule A, ScheduleC, Schedule SE, and Forms 4562, 4684, 8283, 8606, 8829, and 8863.

INSTRUCTIONS: If you are using tax software to prepare the tax return or are not completing phase III of the problem, ignore the instructions that follow.

As in phase I, there are forms in phase II that cannot be completed without additional information which is provided in phase III. Therefore, as a general rule, you should only post the information to the appropriate form and not compute totals for that form. The following specific instructions will assist you in preparing Part II of the return.

  • The only form that can be completed at the end of phase II is Form 8283.
  • Do not calculate total income or adjusted gross income on page 1 of Form 1040.
  • Post the appropriate information on page 2 of Form 1040, but do not total this page, compute the federal tax liability, or determine the refund or balance due.
  • Do not calculate the total itemized deductions on Schedule A.
  • Do not total Joyce’s expenses on Schedule C.
  • Do not compute Joyce’s self-employment tax on Schedule SE.
  • Do not complete the summary section of Form 4562.
  • Complete Form 4684 only to the point at which adjusted gross income is requested.
  • On Form 8829, complete Part I, and only post the appropriate indirect expenses. Do not calculate the allowable depreciation or the allowable home office deduction.

PHASE III—CHAPTERS 9–12

This is the third and final phase of the Schnappauf family’s tax return. This phase incorporates the material in Chapters 9, 10, 11, and 12 requires you to analyze the various types of property transactions discussed in those chapters.

  • On February11, 2012, Bill inherits his father’s summer home. The house, located in South Lake Tahoe, Nevada, has a fair market value of $496,000 at the date of his father’s death. His parents had purchased the house in 1974 for $127,000 and made $59,000 worth of capital improvements to it. Twenty percent of the total value of the property is attributable to the land. Because Bill and Joyce ultimately would like to use the property as a vacation home, they decide to rent it out. Bill actively participates in the management of the property. The property is first advertised for rent on March 1, 2012, but is not rented until April 15, 2012. Bill pro-vides the following income and expense information for the Lake Tahoe rental property:
  • The Schnappaufs receive Form 1099-B (Exhibit A-15) from Pebble Beach Investors for the sale of several securities. Details on the securities sales are provided below. The selling price listed is net of brokerage commissions and represents the amount the Schnappaufs actually receive from the sale.

Rent$18,000

Repairs 4,720

Management fee 2,750

Property taxes 9,375

Insurance 1,900

In addition, Bill buys a new stove for $1,240 and a new refrigerator for $970 on March 20, 2012.

DatePurchase

StockAcquiredDate SoldSale Price Price

150 shares Pfizer Corporation5/12/898/15/12$6,000$*

300 shares Texas Instruments7/30/9410/25/1217,100$**

50 shares Alcoa6/10/0610/23/125251,800

25 shares Luminent4/28/129/4/129002,700

60 shares Textron9/11/1210/27/1210,4109,100

300 shares Hasbro1/7/0112/20/126,1253,150

*When Joyce graduated from college on May 12, 1989, her father gave her 150 shares of Pfizer Corporation stock that he had acquired on October 27, 1981, for $1,300. At the date of the gift, the fair market value of the stock was $1,800. In January 1998, Pfizer Corporation stock split 2 for 1.

**The Schnappaufs acquired 500 shares of preferred stock in Texas Instruments for $7,810. Shortly after the purchase, they received a nontaxable 10% stock dividend.

3. On May 18, 2012, Joyce purchases a computer system for $2,560. She also buys a color printer/copier/fax machine for $560. All the equipment is used exclusively in her business.

4. On June 12, 2012, Joyce sells her old computer system for $355 and her printer for $110. She had acquired the computer system and printer on February 18, 2009, for $2,710 and $490, respectively. When the Schnappaufs prepared their 2009 tax return, they elected to expense the computer and printer using Section 179. The computer system and the printer were used exclusively in her business.

5. Joyce receives a Schedule K-1 (Exhibit A-16) for her interest in the furniture-restoration business.

6. Other information:

a. The rental property in Lake Tahoe is located at 100 Paraiso Drive, South Lake Tahoe (88197).

INSTRUCTIONS: To complete phase III, you need the following additional forms: Schedule E and Forms 4562 and 8582. You now have all the information necessary to complete the schedules that you did not finish in phases I and II.

Tutor Answer

Manal25
School: Rice University

Hello there :)Please find the files attached.P.S. Other files to follow

Form

1040

2012

(99)

Department of the Treasury—Internal Revenue Service

U.S. Individual Income Tax Return

For the year Jan. 1–Dec. 31, 2012, or other tax year beginning

OMB No. 1545-0074

, 2012, ending

IRS Use Only—Do not write or staple in this space.

See separate instructions.

, 20

Your social security number

Your first name and initial

Last name

William

Schnappauf

Joyce

Schnappauf

1 5 0 5 2 0 5 4 6

Spouse’s social security number

Last name

If a joint return, spouse’s first name and initial

3 7 1 4 2 5 2 0 7

Apt. no.

Home address (number and street). If you have a P.O. box, see instructions.



27 Northup Street

City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions).

Wakefield

Filing Status
Check only one
box.

Exemptions

Foreign province/state/county

1
2
3



6a
b



Attach Form(s)
W-2 here. Also
attach Forms
W-2G and
1099-R if tax
was withheld.

If you did not
get a W-2,
see instructions.
Enclose, but do
not attach, any
payment. Also,
please use
Form 1040-V.

Adjusted
Gross
Income

child’s name here. ▶

7
8a
b
9a
b

5

Qualifying widow(er) with dependent child

Yourself. If someone can claim you as a dependent, do not check box 6a .

Spouse
.
Dependents:


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.

(2) Dependent’s
social security number

Last name

Will Higgins
Dan Higgins
Tom Higgins
d

Head of household (with qualifying person). (See instructions.) If
the qualifying person is a child but not your dependent, enter this

Married filing separately. Enter spouse’s SSN above
and full name here. ▶

c

Income

4

Single
Married filing jointly (even if only one had income)

(1) First name

If more than four
dependents, see
instructions and
check here ▶

Presidential Election Campaign
Check here if you, or your spouse if filing
jointly, want $3 to go to this fund. Checking
Foreign postal code
a box below will not change your tax or
refund.
You
Spouse

RI 02879

Foreign country name

Total number of exemptions claimed

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Son
Son
Son

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Wages, salaries, tips, etc. Attach Form(s) W-2
.
Taxable interest. Attach Schedule B if required .
Tax-exempt interest. Do not include on line 8a .
Ordinary dividends. Attach Schedule B if required

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}

(4) ✓ if child under age 17
qualifying for child tax credit
(see instructions)

(3) Dependent’s
relationship to you

3 7 2 4 6 2 6 1 1
3 7 7 4 2 3 4 1 1
3 7 5 4 9 6 5 1 1

Make sure the SSN(s) above
and on line 6c are correct.

Boxes checked
on 6a and 6b
No. of children
on 6c who:
• lived with you



• did not live with
you due to divorce
or separation
(see instructions)



Dependents on 6c
not entered above

Add numbers on
lines above ▶

5

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8b
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7

134,541

8a

2,156

.

1,957
. . . .

9a

1,833

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1,833
. . . .
. . . .

10
11

619

12
13
14

10,784
19,496
465

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3

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2

10
11

Qualified dividends . . . . . . . . . . .
9b
Taxable refunds, credits, or offsets of state and local income taxes
Alimony received . . . . . . . . . . . . . . .

12
13
14

Business income or (loss). Attach Schedule C or C-EZ . . . . . . . . .
Capital gain or (loss). Attach Schedule D if required. If not required, check here ▶
Other gains or (losses). Attach Form 4797 . . . . . . . . . . . . .

15a
16a
17

IRA distributions .
15a
b Taxable amount
. . .
Pensions and annuities 16a
b Taxable amount
. . .
Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E

15b
16b
17

0
0
3,995

18
19
20a

Farm income or (loss). Attach Schedule F .
Unemployment compensation . . . .
Social security benefits 20a

18
19
20b

0

21
22

Other income. List type and amount
Combine the amounts in the far right column for lines 7 through 21. This is your total income

23

Educator expenses

24

Certain business expenses of reservists, performing artists, and
fee-basis government officials. Attach Form 2106 or 2106-EZ

25

Health savings account deduction. Attach Form 8889

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b Taxable amount

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23

0

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24
25

0
0

26
27
28

Moving expenses. Attach Form 3903 . . . . . .
Deductible part of self-employment tax. Attach Schedule SE .
Self-employed SEP, SIMPLE, and qualified plans
. .

26
27
28

0
762
0

29
30
31a

Self-employed health insurance deduction
Penalty on early withdrawal of savings . .

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0
0

32
33
34

Alimony paid b Recipient’s SSN ▶
IRA deduction . . . . . . .
Student loan interest deduction . .
Tuition and fees. Attach Form 8917 .

29
30
31a

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32
33
34

2,710

35
36
37

Domestic production activities deduction. Attach Form 8903
35
Add lines 23 through 35 . . . . . . . . . . . . .
Subtract line 36 from line 22. This is your adjusted gross income

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For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions.

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0
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21
22

5,370
179,259

36
37

3,472
175,787

Cat. No. 11320B

Form

1040

(2012)

Page 2

Form 1040 (2012)

Tax and
Credits
Standard
Deduction
for—
• People who
check any
box on line
39a or 39b or
who can be
claimed as a
dependent,
see
instructions.
• All others:
Single or
Married filing
separately,
$5,950
Married filing
jointly or
Qualifying
widow(er),
$11,900
Head of
household,
$8,700

Other
Taxes

Payments
If you have a
qualifying
child, attach
Schedule EIC.

38

Amount from line 37 (adjusted gross income)

39a

Check
if:

b

Sign
Here

Paid
Preparer
Use Only

.

You were born before January 2, 1948,
Spouse was born before January 2, 1948,

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Blind.
Blind.

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}

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Total boxes
checked ▶ 39a

If your spouse itemizes on a separate return or you were a dual-status alien, check

44
45
46

Alternative minimum tax (see instructions). Attach Form 6251 .
Add lines 44 and 45 . . . . . . . . . . . . . .

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Foreign tax credit. Attach Form 1116 if required .

49
50
51
52
53
54
55

Residential energy credits. Attach Form 5695 . . . .
52
3800 b
8801 c
Other credits from Form: a
53
Add lines 47 through 53. These are your total credits . . . . .
Subtract line 54 from line 46. If line 54 is more than line 46, enter -0-

56
57

Self-employment tax. Attach Schedule SE . . . .
Unreported social security and Medicare tax from Form:

58
59a
b

Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required
Household employment taxes from Schedule H

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.

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0

Credit for child and dependent care expenses. Attach Form 2441

Education credits from Form 8863, line 19 . . . . .
Retirement savings contributions credit. Attach Form 8880
Child tax credit. Attach Schedule 8812, if required . . .

49
50
51

633

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a
4137

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b

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0
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8919

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First-time homebuyer credit repayment. Attach Form 5405 if required

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Other taxes. Enter code(s) from instructions

62
63

Federal income tax withheld from Forms W-2 and 1099 . .
2012 estimated tax payments and amount applied from 2011 return

64a
b

Earned income credit (EIC) . . . . . .
Nontaxable combat pay election
64b
Additional child tax credit. Attach Schedule 8812 .

Add lines 55 through 60. This is your total tax

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American opportunity credit from Form 8863, line 8 .
Reserved . . . . . . . . . . . . .
Amount paid with request for extension to file . .

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62
63
64a

43

123,835

44
45
46

20,886
0
20,886

54

633
20,253
1,325
0

32,952

55
56
57



0
0
0

60
61

21,578

72
73

26,675
5,097

74a

5,097

25,353
900

65
66

422

67
68

. . . .
69
Credit for federal tax on fuels. Attach Form 4136 . . . .
70
Credits from Form: a
2439 b
Reserved c
8801 d
8885 71
Add lines 62, 63, 64a, and 65 through 71. These are your total payments .

0

Excess social security and tier 1 RRTA tax withheld

.

.

.

0
.



If line 72 is more than line 61, subtract line 61 from line 72. This is the amount you overpaid

74a
b
d

Amount of line 73 you want refunded to you. If Form 8888 is attached, check here . ▶
▶ c Type: ✔ Checking
Routing number
Savings
x x x x x x x x x
Account number
x x x x x x x x x x x x x x x x x
0
Amount of line 73 you want applied to your 2013 estimated tax ▶ 75
Amount you owe. Subtract line 72 from line 61. For details on how to pay, see instructions ▶

77
77
Estimated tax penalty (see instructions) . . . . . . .
Do you want to allow another person to discuss this return with the IRS (see instructions)?
Designee’s
name ▶

142,835
19,000

58
59a
59b

73

75
76

40
41
42

0

.

.

60
61

65
66

.
.

47
48

.

175,787

39b
.
.

.
.

47
48

38

0

here ▶

Exemptions. Multiply $3,800 by the number on line 6d . . . . . . . . . . . .
Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- . .
Form 4972 c
962 election
Tax (see instructions). Check if any from: a
Form(s) 8814 b

Phone
no. ▶

76

Yes. Complete below.



No

Personal identification

number (PIN)

Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief,
they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

Your signature

Date

Spouse’s signature. If a joint return, both must sign.

Date



Joint return? See
instructions.
Keep a copy for
your records.

.

42
43



Third Party
Designee

.

Itemized deductions (from Schedule A) or your standard deduction (see left margin)
Subtract line 40 from line 38
. . . . . . . . . . . . . . . . .

Direct deposit?
See

instructions.

Amount
You Owe

.

40
41

67
68
69
70
71
72

Refund

{

.

Daytime phone number

Sales Manager
Spouse’s occupation

If the IRS sent you an Identity Protection
PIN, enter it
here (see inst.)
PTIN
Check
if
self-employed

Author

Print/Type preparer’s name

Firm’s name

Your occupation

Preparer’s signature

Date



Firm's EIN

Firm’s address ▶

Phone no.



Form 1040 (2012)


Form

4562

Depreciation and Amortization
▶ See

▶ Attach

separate instructions.

Attachment
Sequence No. 179

to your tax return.

Name(s) shown on return

Business or activity to which this form relates

Bill Schnappauf

Rental Royalty 1

1
2
3
4
5

2012

(Including Information on Listed Property)

Department of the Treasury
Internal Revenue Service (99)

Part I

OMB No. 1545-0172

Identifying number

150-52-0546

Election To Expense Certain Property Under Section 179
Note: If you have any listed property, complete Part V before you complete Part I.

Maximum amount (see instructions) . . . . . . . . . . . . . . . . . .
Total cost of section 179 property placed in service (see instructions) . . . . . .
Threshold cost of section 179 property before reduction in limitation (see instructions) .
Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0- . . . . .
Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If
separately, see instructions . . . . . . . . . . . . . . . . . . . .

6

(a) Description of property

(b) Cost (business use only)

Computer
All other assets

. . .
. . .
. . .
. . .
married
. . .

. .
. .
. .
. .
filing
. .

500,000
2,000,000
0

5

500,000

(c) Elected cost

2,560
560

2,560
560

7 Listed property. Enter the amount from line 29 . . . . . . . . .
7
8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7
. . . . . .
9 Tentative deduction. Enter the smaller of line 5 or line 8 . . . . . . . . . . . . . . . .
10 Carryover of disallowed deduction from line 13 of your 2011 Form 4562 . . . . . . . . . . .
11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instructions)
12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11 . . . . .
13
13 Carryover of disallowed deduction to 2013. Add lines 9 and 10, less line 12 ▶
Note: Do not use Part II or Part III below for listed property. Instead, use Part V.

Part II

1
2
3
4

0

8
9
10
11
12

3,120
3,120
500,000
3,120
0

Special Depreciation Allowance and Other Depreciation (Do not include listed property.) (See instructions.)

14 Special depreciation allowance for qualified property (other than listed property) placed in service
during the tax year (see instructions) . . . . . . . . . . . . . . . . . . . . . .
15 Property subject to section 168(f)(1) election .
16 Other depreciation (including ACRS) . . .

.
.

.
.

.
.

.
.

.
.

.
.

.
.

.
.

.
.

.
.

.
.

.
.

.
.

.
.

.
.

.
.

.
.

.
.

.
.

14
15
16

0

Part III MACRS Depreciation (Do not include listed property.) (See instructions.)
Section A
17
17 MACRS deductions for assets placed in service in tax years beginning before 2012 . . . . . . .
18 If you are electing to group any assets placed in service during the tax year into one or more general
asset accounts, check here . . . . . . . . . . . . . . . . . . . . . . ▶
Section B—Assets Placed in Service During 2012 Tax Year Using the General Depreciation System
(a) Classification of property

(b) Month and year
placed in
service

(c) Basis for depreciation
(business/investment use
only—see instructions)

(d) Recovery
period

(e) Convention

(f) Method

0

5.00

HY

200DB

MM
MM
MM
MM

S/L
S/L
S/L
S/L
S/L

19a
b
c
d
e
f
g
h

3-year property
5-year property
7-year property
10-year property
15-year property
20-year property
25-year property
Residential rental
property
i Nonresidential real
property

25 yrs.
27.5 yrs.
27.5 yrs.
39 yrs.

(g) Depreciation deduction

0

Section C—Assets Placed in Service During 2012 Tax Year Using the Alternative Depreciation System
S/L
20a Class life
12 yrs.
S/L
b 12-year
40 yrs.
MM
S/L
c 40-year

Part IV Summary (See instructions.)

21 Listed property. Enter amount from line 28 . . . . . . . . . . . . . . . . . . . .
22 Total. Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (g), and line 21. Enter
here and on the appropriate lines of your return. Partnerships and S corporations—see instructions .
23 For assets shown above and placed in service during the current year, enter the
portion of the basis attributable to section 263A costs
. . . . . . .
23
For Paperwork Reduction Act Notice, see separate instructions.

Cat. No. 12906N

21

0

22

3,120

Form 4562 (2012)

Page 2
Listed Property (Include automobiles, certain other vehicles, certain computers, and property used for
entertainment, recreation, or amusement.)

Form 4562 (2012)

Part V

Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a,
24b, columns (a) through (c) of Section A, all of Section B, and Section C if applicable.
Section A—Depreciation and Other Information (Caution: See the instructions for limits for passenger automobiles.)
✔ Yes
24a Do you have evidence to support the business/investment use claimed?
24b If “Yes,” is the evidence written? ✔ Yes
No
(c)
(a)
(b)
Business/
(d)
Type of property (list Date placed
investment use Cost or other basis
vehicles first)
in service
percentage

(e)
Basis for depreciation
(business/investment
use only)

(f)
Recovery
period

(g)
Method/
Convention

(h)
Depreciation
deduction

No

(i)
Elected section 179
cost

25 Special depreciation allowance for qualified listed property placed in service during
the tax year and used more than 50% in a qualified business use (see instructions) .

25
0
26 Property used more than 50% in a qualified business use:
%
%
%
27 Property used 50% or less in a qualified business use:
S/L –
Volster
01/02/12
40 %
S/L –
%
S/L –
%
28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1 .
28
0
29 Add amounts in column (i), line 26. Enter here and on line 7, page 1 . . . . . . . . . . . .
29
0
Section B—Information on Use of Vehicles
Complete this section for vehicles used by a sole proprietor, partner, or other “more than 5% owner,” or related person. If you provided vehicles
to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles.
(a)
Vehicle 1

30 Total business/investment miles driven during
the year (do not include commuting miles) .
31 Total commuting miles driven during the year
32 Total other personal (noncommuting)
miles driven
. . . . . . . . .
33 Total miles driven during the year. Add
lines 30 through 32 . . . . . . .
34 Was the vehicle available for personal
use during off-duty hours? . . . . .
35 Was the vehicle used primarily by a more
than 5% owner or related person? . .

(b)
Vehicle 2

(c)
Vehicle 3

(d)
Vehicle 4

(e)
Vehicle 5

(f)
Vehicle 6

4,200
0

6,300

10,500

Yes

No

Yes

0

No

0

Yes

No

Yes

0

No

Yes

0

No

Yes

0

No





36 Is another vehicle available for personal use?
Section C—Questions for Employers Who Provide Vehicles for Use by Their Employees
Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who are not
more than 5% owners or related persons (see instructions).
No
37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by Yes
your employees? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your
employees? See the instructions for vehicles used by corporate officers, directors, or 1% or more owners . .

39 Do you treat all use of vehicles by employees as personal use?
. . . . . . . . . . . . . . . .
40 Do you provide more than five vehicles to your employees, obtain information from your employees about the
use of the vehicles, and retain the information received? . . . . . . . . . . . . . . . . . . .
41 Do you meet the requirements concerning qualified automobile demonstration use? (See instructions.) .
Note: If your answer to 37, 38, 39, 40, or 41 is “Yes,” do not complete Section B for the covered vehicles.

.

.

Part VI Amortization
(a)
Description of costs

(b)
Date amortization
begins

(c)
Amortizable amount

(e)
Amortization
period or
percentage

(d)
Code section

(f)
Amortization for this year

42 Amortization of costs that begins during your 2012 tax year (see instructions):

43 Amortization of costs that began before your 2012 tax year . . . . . .
44 Total. Add amounts in column (f). See the instructions for where to report .

.
.

.
.

.
.

.
.

.
.

.
.

.
.

43
44

0

Form 4562 (2012)


Form

4797

Department of the Treasury
Internal Revenue Service

Sales of Business Property

OMB No. 1545-0184

2012

(Also Involuntary Conversions and Recapture Amounts
Under Sections 179 and 280F(b)(2))
Attach to your tax return.
Information about Form 4797 and its separate instructions is at www.irs.gov/form4797.




Attachment
Sequence No.

27

Identifying number

Name(s) shown on return

Bill Schnappauf
150-52-0546
1 Enter the gross proceeds from sales or exchanges reported to you for 2012 on Form(s) 1099-B or 1099-S (or
substitute statement) that you are including on line 2, 10, or 20 (see instructions) . . . . . . . .
1

Part I

Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions From Other
Than Casualty or Theft—Most Property Held More Than 1 Year (see instructions)
(a) Description
of property

2

(c) Date sold
(mo., day, yr.)

(b) Date acquired
(mo., day, yr.)

(e) Depreciation
allowed or
allowable since
acquisition

(d) Gross
sales price

(f) Cost or other
basis, plus
improvements and
expense of sale

(g) Gain or (loss)
Subtract (f) from the
sum of (d) and (e)

0
0
0

3
4
5

Gain, if any, from Form 4684, line 39 . . . . . . . . . . .
Section 1231 gain from installment sales from Form 6252, line 26 or 37 .
Section 1231 gain or (loss) from like-kind exchanges from Form 8824 .

3
4
5

0
0
0

6
7

Gain, if any, from line 32, from other than casualty or theft. . . . . . . . . . . . . . . . . .
Combine lines 2 through 6. Enter the gain or (loss) here and on the appropriate line as follows: . . . . . . .
Partnerships (except electing large partnerships) and S corporations. Report the gain or (loss) following the
instructions for Form 1065, Schedule K, line 10, or Form 1120S, Schedule K, line 9. Skip lines 8, 9, 11, and 12 below.
Individuals, partners, S corporation shareholders, and all others. If line 7 is zero or a loss, enter the amount from
line 7 on line 11 below and skip lines 8 and 9. If line 7 is a gain and you did not have any prior year section 1231
losses, or they were recaptured in an earlier year, enter the gain from line 7 as a long-term capital gain on the
Schedule D filed with your return and skip lines 8, 9, 11, and 12 below.

6
7

0
0

8

Nonrecaptured net section 1231 losses from prior years (see instructions) .

8

9

Subtract line 8 from line 7. If zero or less, enter -0-. If line 9 is zero, enter the gain from line 7 on line 12 below. If line
9 is more than zero, enter the amount from line 8 on line 12 below and enter the gain from line 9 as a long-term
capital gain on the Schedule D filed with your return (see instructions) . . . . . . . . . . . . . .

Part II
10

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.

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.
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.
.

.

.
.
.

.

.
.
.

.

.
.
.

.

Ordinary Gains and Losses (see instructions)

9

Ordinary gains and losses not included on lines 11 through 16 (include property held 1 year or less):
0
0
0

11

Loss, if any, from line 7 .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

11 (

12
13
14

Gain, if any, from line 7 or amount from line 8, if applicable
Gain, if any, from line 31 . . . . . . . . . .
Net gain or (loss) from Form 4684, lines 31 and 38a . .

.
.
.

.
.
.

.
.
.

.
.
.

.
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.

.
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.

.
.
.

.
.
.

.
.
.

12
13
14

465
0

15
16
17

Ordinary gain from installment sales from Form 6252, line 25 or 36 .
Ordinary gain or (loss) from like-kind exchanges from Form 8824. .
Combine lines 10 through 16 . . . . . . . . . . . .

.
.
.

.
.
.

.
.
.

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.

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.
.
.

15
16
17

0
0
465

18

For all except individual returns, enter the amount from line 17 on the appropriate line of your return and skip lines a
and b below. For individual returns, complete lines a and b below:

.

.

.

.

.

.

.

.

.

a If the loss on line 11 includes a loss from Form 4684, line 35, column (b)(ii), enter that part of the loss here. Enter the part
of the loss from income-producing property on Schedule A (Form 1040), line 28, and the part of the loss from property
used as an employee on Schedule A (Form 1040), line 23. Identify as from “Form 4797, line 18a.” See instructions . .
b Redetermine the gain or (loss) on line 17 excluding the loss, if any, on line 18a. Enter here and on Form 1040, line 14
For Paperwork Reduction Act Notice, see separate instructions.

Cat. No. 13086I

18a
18b

)

465

Form 4797 (2012)

Page 2

Form 4797 (2012)

Part III
19

Gain From Disposition of Property Under Sections 1245, 1250, 1252, 1254, and 1255
(see instructions)

(a) Description of section 1245, 1250, 1252, 1254, or 1255 property:

(b) Date acquired
(mo., day, yr.)

(c) Date sold (mo.,
day, yr.)

02/18/09
2/18/09

6/12/12
6/12/12

Property C

Property D

A Computer
B Printer/Fax
C
D
These columns relate to the properties on lines 19A through 19D. ▶

Property A

Property B

20
21
22
23

Gross sales price (Note: See line 1 before completing.)
Cost or other basis plus expense of sale . . . .
Depreciation (or depletion) allowed or allowable . .
Adjusted basis. Subtract line 22 from line 21. . .

.
.
.
.

20
21
22
23

355
2,710
2,710
0

110
490
490
0

0

0

24

Total gain. Subtract line 23 from line 20 .

355

110

0

0

2,710
355

490
110

0

0

0

0

0
0

0
0

28a
28b

0

0

0

0

29a
29b

0

0

0

0

25

26

27

28

.

.

.

24

If section 1245 property:
a Depreciation allowed or allowable from line 22 .
b Enter the smaller of line 24 or 25a . . . .

.

.
.

.
.

25a
25b

If section 1250 property: If straight line depreciation was used,
enter -0- on line 26g, except for a corporation subject to section 291.
a Additional depreciation after 1975 (see instructions) .

26a

b Applicable percentage multiplied by the smaller of line
24 or line 26a (see instructions) . . . . . . .

26b

c Subtract line 26a from line 24. If residential rental property
or line 24 is not more than line 26a, skip lines 26d and 26e
d Additional depreciation after 1969 and before 1976. .
e Enter the smaller of line 26c or 26d . . . . . .
f Section 291 amount (corporations only) . . . . .
g Add lines 26b, 26e, and 26f. . . . . . . . .

26c
26d
26e
26f
26g

If section 1252 property: Skip this section if you did not
dispose of farmland or if this form is being completed for a
partnership (other than an electing large partnership).
a Soil, water, and land clearing expenses . . . . .
b Line 27a multiplied by applicable percentage (see instructions)
c Enter the smaller of line 24 or 27b . . . . . .

27a
27b
27c

If section 1254 property:
a Intangible drilling and development costs, expenditures
for development of mines and other natural deposits,
mining exploration costs, and depletion (see
instructions) . . . . . . . . . . . . .
b Enter the smaller of line 24 or 28a . . . . . .

29

If section 1255 property:
a Applicable percentage of payments excluded from
income under section 126 (see instructions) . . . .
b Enter the smaller of line 24 or 29a (see instructions) .

Summary of Part III Gains. Complete property columns A through D through line 29b before going to line 30.
30
31

Total gains for all properties. Add property columns A through D, line 24 . . . . . . . .
Add property columns A through D, lines 25b, 26g, 27c, 28b, and 29b. Enter here and on line 13 .

32

Subtract line 31 from line 30. Enter the portion from casualty or theft on Form 4684, line 33. Enter the portion from
other than casualty or theft on Form 4797, line 6 . . . . . . . . . . . . . . . . . . . .

Part IV
...

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