Assignment
Robert A. Kliesh, age 41, is single and has no dependents. Robert's Social Security number is 111-11-1111. His address is 201 Front Street, Missoula, MT 59812. He does not contribute to the Presidential Election Campaign fund through the Form 1040. Robert is independently wealthy as a result of having inherited sizable holdings in real estate and corporate stocks and bonds. Robert is a minister at First Presbyterian Church, but he accepts no salary from the church. However, he does reside in the church's parsonage free of charge. The fair rental value of the parsonage is $3,000a month. The church also provides him with a cash grocery allowance of $200 a week. Examination of Robert's financial records provides the following information for 2014.
a. On January 16, 2014, Robert sold 1,000 shares of stock for a loss of $12,000. The stock was acquired 14 months ago. On February 15, 2014, he sold 400 shares of stock for a gain of $13,100. That stock was acquired in 2008.
b. He received $30,000 of interest on private activity bonds that he had purchased in 2008. He also received $40,000 of interest on tax-exempt bonds that are not private activity bonds.
c. He received gross rent income of $190,000 from an apartment complex he owns. He qualifies as an active participant.
d. Expenses related to the apartment complex, which he acquired in 2007, were $225,000.
e. Robert's interest income (on CDs) totaled $23,000. Because he invests only in growth stocks, he has no dividend income.
f. He won $60,000 on the lottery.
g. Robert was the beneficiary of an $800,000 life insurance policy on his uncle Jake. He received the proceeds in October.
h. Robert contributed $5,500 to his traditional IRA.
i. Robert incurred the following potential itemized deductions. • $5,200 fair market value of stock contributed to Presbyterian Church (basis of stock was $3,000). He had owned the stock for two years. • $4,200 interest on consumer purchases. • $3,900 state and local income tax. • $15,000 of medical expenses that he paid on behalf of a parishioner who died. • $300 for a safe deposit box that is used to store investments and related legal documents. • $5,000 paid for lottery tickets associated with playing the state lottery. Robert contributed $5,000 of his winnings to the church. • Because Robert lived in Montana, he paid no sales tax. • $750 contribution to the campaign of the Democratic candidate for governor.
j. Robert made estimated Federal tax payments of $7,500. k. Robert was covered by health insurance for the entire tax year.
Use Forms You will need Forms 1040, 6251, 8283, 8582, 8949, and Schedules A, B, D, and E to compute the tax liability (including AMT) for Robert A. Kliesh for 2014.