tax return problem 4

mcgraw-hill taxation of individual

appendix c c-5

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Tax Return Problem 4 Appendix C C-5
Use the following information to complete Phillip and Claire Dunphy’s 2012 federal income tax return. If information is missing, use reasonable assumptions to fill in the gaps. Ignore the alternative minimum tax for this problem.
Any required forms, schedules, and instructions can be found at the IRS Web site ( The instructions can be helpful in completing the forms. The following forms are required:
Schedule C
Schedule D
Form 4562
Form 4797
Form 8949
Schedule SE
Phillip and Claire are married and file a joint return. Phillip is self-employed as a real estate agent, and Claire is a flight attendant. Phillip and Claire have three dependent children. All three children live at home with Phillip and Claire for the entire year.
The Dunphys provide you with the following additional information:
The Dunphys do not want to contribute to the presidential election campaign.
The Dunphys live at 3701 Brighton Avenue, Los Angeles, CA 90018.
Phillip’s birthday is 11/5/1965 and his Social Security number is 321-44-5766.
Claire’s birthday is 5/12/1968 and her Social Security number is 567-77-1258.
Haley’s birthday is 11/6/1999 and his Social Security number is 621-18-7592.
Alex’s birthday is 2/1/2001 and her Social Security number is 621-92-8751.
Luke’s birthday is 12/12/2005 and his Social Security number is 621-99-9926.
The Dunphys do not have any foreign bank accounts or trusts.
Claire is a flight attendant for Western American Airlines (WAA), where she earned $57,000 in salary. WAA withheld federal income tax of $6,375, state income tax of $1,800, Los Angeles city income tax of $675, Social Security tax of $3,600, and Medicare tax of $825.
Phillip and Claire received $300 of interest from State Savings Bank on a joint account. They also received a qualified dividend of $395 on jointly owned stock in Xila Corporation.
Phillip’s real estate business is named “Phillip…


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