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Student instructions:
Use
IRS Publication 550 pages
39 through 81,
IRS Publication 523,
IRS Publication 544,
Form 1040 and
California 540A /
540 Booklet to
complete this topic.
Prepare
Form 1040,
Form 4797,
Form 8824,
Schedule D,
Schedule C,
Schedule SE,
California
Form 540
and
Schedule CA.
Karen (Age 24), a single person, bought her home February 23, 1996. She lived in the home until May 31, 2005, when she moved out of the house and put it up for rent. Karen rented her home until May 31, 2006. That's when she moved back into the house and lived there until she sold it on January 10, 2007. Karen wants to exclude all of the gain from the sale of her home.
Karen's records show the following:
 | Original cost.......................................$50,000.00 |
| Legal fees for title search........................$ 750.00 |
| Improvements (deck).............................$ 2,000.00 |
| Selling price.......................................$195,000.00 |
| Commission and expenses of sale...............$15,000.00 |
| Depreciation claimed after May 6, 1997.........$1,642.00 |
Last year on December 16, 2006, Karen closed her dress shop (Karen's Dress Shop). Karen sold all the equipment she had used in her dress shop on March 16, 2007 for $3,000. She originally paid $6,000 for the equipment on January 20, 1991, and has fully depreciated it.
Karen's total sales and expenses for the dress shop from January 1 to December 16 were:
| Total Sales..................$36,000.00 |
| Purchases...................$10,800.00 |
| Advertising..................$1,600.00 |
| Telephone...................$920.00 |
| Utilities......................$1,900.00 |
| supplies......................$1500.00 |
| Beginning Inventory.......$15,000.00 |
| Ending Inventory...........$15,000.00 |
| She valued her inventory at cost and there was no change in determining quantities. |
Karen's Dress Shop at 1723 W 7th Street, Los Angeles, California.
Karen sold the equipment she used in her dress shop for $3,000. She originally paid $6,000 for on January 20, 1991, and had fully depreciated it.
Karen worked part time as a youth counselor and here is her W2 form:
Have your return prepared and ready to answer the questions.
Option 1: Complete Quiz online.
Instructions to submit quiz successfully: Step-by-Step check list
When prompted for your name, please enter your CTEC or Preparer Number (if you have a number) with your name as follows: First, last name, Number (e.g. John Smith A012345 / John Smith P012345)
Option 2: Complete and mail answer sheet.
If you choose not to complete the quiz by pressing "Start quiz" above, you can print questions and answer-sheet to mail to us. If you complete the online quiz, the advantage is that you get an automatic score as apposed to waiting for a response on a manually graded quiz. You can also print the questions and answer sheet and after you answered the questions on paper submit it online by choosing "Start Quiz" above. Please don't sent answer sheet by certified mail.
Print questions Print Answer sheet
Please Note: You must also complete the tax return for this assignment. If you turn in incomplete work, such as purposely not answering the questions regarding the return you prepared, you will not be given credit for the topic.
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