Elf Village Productions

Welcome to the world's first ePractice case, a learning tool that requires you to use source documents and complete "real world" tax forms in a self-grading excel based practice set.

You have been assigned to complete a tax return for one of the firm's clients. The relevant information can be found on the "Facts" sheet and also on the related source documents.

The tax manager will review your work and will provide you with immediate feedback when you upload the excel file to the same screen that it was downloaded from:

This is the case assigned to huaixuan huang HH6798

01. Our clients Grover McKinley, DOB: 7/28/1968, SS# 990-02-2016 and Lucretia McKinley, DOB: 1/28/1963, SS# 989-35-0060 have been married for 25 years.

02. They live at 1245 Flagler Avenue Coral Gables, FL 33143.

03. Grover is an accountant and Lucretia is a a small business consultant.

04. huaixuan, their child was born 5/26/1995. huaixuan has received a 1098-T for attending the first semester at Coral Gables Community College SS#, 991-46-0028. huaixuan is a fulltime student and lived at home and huaixuan's parents paid for more than half of huaixuan's living expenses.

05. Avery, their new baby was born 7/28/2015. Her SS number is, 986-64-0067. Andrew huang born 5/25/2007, SS# 987-64-0014 is a first cousin of Lucretia and lived with her since February of 2013. Lucretia provided 80% of Andrew's support. Andrew's total income for the year was $3,000.00.

06. Grover received a W2 from Deloitte Touche and a W2 from KPMG, and did not participate in an employer provided retirement plan during the year. Lucretia inherited $ 90,000 from her grandfather in September 2015.

07. Lucretia received a K1 from MNH Corp. in which she did not materially participate although all her money was at risk. Lucretia paid estimated federal taxes of $7,650.00.

08. They received a 1099-INT from Wells Fargo Bank and $1,870 from Coral Gables Municipal General Revenue Bonds.

09. As per a 1098-I, Grover and Lucretia paid Wells Fargo Bank $7,400.00 in interest for the home mortgage. They also paid $4,025.00 in real estate taxes,$2,641.00 for homeowners insurance on the home and $264.10 to have the it painted.

10. Other interest and taxes paid by Grover and Lucretia include: $1,320.00 interest on the loan for the Dodge, the personal automobile which is shared with huaixuan, $396.00 interest on credit cards and general sales tax of $2,450.00 for which they have receipts. Note: the general sales tax rate is 7.00%

11. The total annual cost of medical insurance for the entire family was $15,221.00 and paid by Grover through an employer provided health insurance plan on an after-tax basis.. Grover and Lucretia paid $2,797.00 for prescription drugs, $900.00 to doctors and dentists, and $3,000.00 to hospitals and clinics. These amounts were co-payments or amounts not covered by insurance. Contact lenses for huaixuan that was not covered by insurance cost $650.00 and cosmetics and other non prescription items from the drug store cost $300.00.

12. Lucretia started Coral Gables Consulting, as a cash method sole proprietorship, on April 15, 2009. The 2015 revenue associated with the business was $40,400.00. The following expenses were incurred $1,636.00 advertising, $9,250.00 supplies and postage of $347.73. She uses a desk in the corner of her bedroom as her office.

13. Lucretia uses a cell phone for business and another cell phone for non-business calls. The cost of the business cell phone was $2,582.00, while the cost of the private phone was $600.00.

14. Grover and Lucretia have the requisite statements from the charities supporting the following contributions to qualified charitable organizations:

-Cash of $2,850.00 given to Plymouth Church in Coral Gables on 5/7/2015.

-A sofa given to Goodwill in Coral Gables on 5/1/2015. The sofa was purchased on 7/28/2010 for $1,160.00 and the fair market value (based upon comparable sales in thrift shops) at the date of contribution was $170.00.

- One hundred shares of Home Depot Inc. was given to the University of Miami. The stock was purchased on 1/3/2015 for $1,600.00. When it was donated on 10/6/2015 it had a value of $2,900.00 based on the sale of other shares that same day.

15. Grover and Lucretia sold 200 shares of Home Depot Inc. stock. The stock was purchased on 1/3/2015 for $3,200.00 and was sold on 10/6/2015 for $5,800.00. On 12/6/2015 they sold 200 shares of Sub Prime Mortgage Corporation for $1,500.00 which cost $5,300.00 when purchases on 3/24/2006.

16. Grover paid $245.00 for subscriptions to professional journals and attended a professional conference in New Orleans. He paid a registration fee of $200.00, $371.00 for airfare, $580.00 for hotel and $254.00 for meals. These items were not reimbursed. In July of 2015, Lucretia received $72.00 for jury duty pay.

17. Grover and Lucretia paid $150.00 in April of 2015 for the preparation of the 2014 tax return and $45.00 for a safe deposit box rental fee that was used for the storage of investment securities.

18. Lucretia contributed $3,000.00 to a traditional individual retirement account on December 18, 2015. This was the first time she contributed to an IRA.

19. On September 8, a freak tornado damaged their home. They filed a claim with their insurance company but received only $12,500.00 due to the high deductable on their policy. The home had a cost of $260,000.00 when they purchased it on 7/2/2001. It was valued at $360,000.00 before the incident and $300,500.00 immediately after.

20. Grover and Lucretia went to Las Vegas three times in 2015. The total cost of airfare, transportation, meals and expenses were $5,700.00. During the year the gambling winnings were $4,400.00 while the gambling losses were $5,300.00. A W-2G was not received.

Attachment:- Tax Case.rar