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Description

In 2018, 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 2020, the Schnappaufs provide the following basic information for preparing their 2018 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 current 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

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Appendix A
INTRODUCTION
The information below will allow you to prepare the 2018 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., Chapters 4, 8, and 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 Chapter 12.
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 2018, 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 2019, the Schnappaufs provide the following basic information for preparing
their 2018 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 current 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—CHAPTERS 1–4
The first phase of the tax return problem is designed to introduce you to some of the tax
forms and the supporting documentation (Forms W-2, 1099-INT, etc.) needed to complete 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 (Exhibit A-1). The 2018 W-2 includes his salary ($98,000),
bonus ($61,000), and income from group-term life insurance coverage in excess
of $50,000 ($132.48), and is reduced by his 7 percent contribution ($6,860) to
USC’s qualified pension plan. The company matches Bill’s contribution to the
plan.
2. The Schnappaufs receive two 1099-INTs for interest (Exhibits A-2 and A-3), two
1099-DIVs for dividends (Exhibits A-4 and A-5), and a combined interest and
dividend statement (Exhibit A-6).
3. Joyce and her brother, Bob, are co-owners of, and active participants in, a furniturerestoration business. Joyce owns 30 percent, and Bob owns 70 percent of the
business. The business was formed as an S corporation in 2010. During 2018, the
company pays $5,000 in dividends. The basis of Joyce’s stock is $33,000.
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Appendix A
4. The Schnappaufs receive a 2017 federal income tax refund of $818 on May 12,
2018. On May 15, 2018, they receive their income tax refund from the state of
Rhode Island. In January 2019, the state mails the Schnappaufs a Form 1099-G
(Exhibit A-7). Their total itemized deductions in 2017 were $20,161.
5. During 2018, Joyce is the lucky ninety-third caller to a local radio station and
wins $300 in cash and a Tablet. 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 Tablet is $720.
However, Joyce has a catalog from Supersonic Electronics that advertises the
Tablet for $595.
6. The Schnappaufs receive a Form W-2G (Exhibit A-8) for their winnings at the
Yardley Casino in Connecticut.
7. On June 26, 2018, Bill receives a check for $15,480 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
$15,100, and the letter from the company stated that his uncle had paid premiums
on the policy of $3,620 (Exhibit A-9).
8. Joyce is active in the school PTO. During the year, she receives an award for
outstanding service to the organization. She receives a plaque and two $125 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
preparing 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.
PREPARATION AID:
Tax forms and instructions can be downloaded from the IRS’s home
page (www.irs.treas.gov). You can also download IRS Publication 17, which is a useful
guide in preparing the tax return.
PHASE II—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 through 8 by
providing you with information concerning the Schnappaufs’ deductions for 2018. They
provide you with the following information.
1. Joyce writes children’s books for a variety of publishers. She has been selfemployed since 2010. 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 four 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, 2018, 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, 2019, and must have it completed by November 30,
2019. The Schnappaufs’ home has two telephones. Joyce has a separate phone number for her business. The information on Joyce’s business is listed below.
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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Appendix A
Royalties (Exhibits A-10 to A-12)
Publisher’s advance
Office supplies
Train tickets
Airfare (4 trips)
Lodging (12 nights)
Meals (12 days)
Telephone ($28 monthly fee per phone line)
Internet provider
Cell phone, including business calls
Business-related postage
Printing/copying
Legal fees
Interest on auto
$4,000
170
535
1,670
2,240
610
672
570
913
87
162
2,000
254
2. On January 2, 2018, 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 45 percent of the time for business and drives a total
of 10,800 miles during 2018. The total expenses for the 10,800 miles driven are:
repairs and maintenance, $240; insurance, $920; and gasoline, $1,960. The correct depreciation expense for 2018 is $684 ($15,200 3 45% 3 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, 2004, 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, 2010, the fair market value of the
house was $108,000. The total household expenses for 2018 are as follows:
Heat
Insurance
Electricity
Repairs to kitchen
Cleaning
$2,170
1,480
740
3,100
1,560
4. Bill began work on his MBA at Denville University. He enrolled in two courses,
and paid $3,000 in tuition and $310 for books.
5. Bill and Joyce each contribute the maximum to their respective IRA accounts in
2018. The IRA account 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 12/31/18 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. The Schnappaufs incur the following medical expenses (before considering the
$700 reimbursement they receive from their health insurance policy):
Medical premiums
Doctors
Chiropractor
Dentist
Vet fees (family dog Sandy)
Prescription drugs
Over-the-counter drugs (aspirin, cough syrup)
$3,800
1,200
650
1,900
345
340
175
In addition, Bill purchases an Exsoaligner machine for $700. The machine was
recommended by the chiropractor to help strengthen Bill’s back muscles.
7. The Schnappaufs pay the following property taxes:
Wakefield house
Family car used by Bill (ad valorem)
Joyce’s car (ad valorem)
$11,200
480
520
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Appendix A
8. 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
Brooks’ Bargain Basement revolving account
Jefferson Trust bank card
$191
67
212
The proceeds from the home equity loan were used to renovate their kitchen.
9. Bill and Joyce make cash charitable contributions to the United Fund Campaign
($5,700), Adelade University ($2,510), Tremon University ($1,900), and Christ
the King Church in Kingston, R.I. ($8,100). The Schnappaufs have documentation to verify their cash contributions. They also donate property to the Salvation
Army on July 15, 2018:
Property
FMV
Original Cost
Antique table
Dishwasher
Sofa bed
Men’s suits (2)
$410
130
90
140
$225
700
800
540
Date Acquired
1/4/07
5/6/11
13/14/13
Various
The Salvation Army acknowledges that these amounts represent the fair market
value of the donated items.
10. The Schnappaufs incur $3,450 in gambling losses.
11. Because Joyce is self-employed, they make federal estimated tax payments of
$210 per quarter on April 15, 2018, June 15, 2018, September 15, 2018, and
January 15, 2019. They also make estimated payments of $150 per quarter to
the state of Rhode Island on April 15, 2018, June 15, 2018, September 15,
2018, and December 31, 2018.
12. Bill and Joyce paid $7,400 in tuition, $840 for books, and $9,300 for room and
board for Will, a junior, to attend Springbrook State University. They also paid
$16,410 in tuition, $950 in books, and $10,100 in room and board for Dan, a
freshman at Prescott College.
13. 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,
Schedule C, 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.
a. The only form that can be completed at the end of phase II is Form 8283.
b. Do not calculate total income or adjusted gross income on page 1 of Form
1040.
c. 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.
d. Do not calculate the total itemized deductions on Schedule A.
e. Do not total Joyce’s expenses on Schedule C.
f. Do not compute Joyce’s self-employment tax on Schedule SE.
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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Appendix A
g. Do not complete the summary section of Form 4562.
h. 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.
1. On February 11, 2018, Bill inherits his father’s summer home. The house, located
in South Lake Tahoe, Nevada, has a fair market value of $550,000 at the date of
his father’s death. His parents had purchased the house in 1979 for $140,000 and
made $122,000 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, 2018, but is not rented until April 15, 2018. Bill
provides the following income and expense information for the Lake Tahoe rental
property:
Rent
$21,000
Repairs
6,250
Management fee
4,800
Property taxes
15,100
Insurance
3,500
In addition, Bill buys a new stove for $1,800 and a new refrigerator for $1,450 on
March 20, 2018.
2. The Schnappaufs receive Form 1099-B (Exhibit A-15) from Pebble Beach Investors for the sale of several securities. The 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.
Stock
Date
Acquired
Date Sold
Sale Price
150 shares Pfizer Corporation
300 shares Texas Instruments
50 shares Alcoa
25 shares Luminent
60 shares Textron
300 shares Hasbro
5/12/95
7/30/00
6/10/12
4/28/18
9/11/18
1/7/07
8/15/18
10/25/18
10/23/18
9/4/18
10/27/18
12/20/18
$ 6,000
17,100
525
900
10,410
6,125
Purchase
Price
$
*
**
1,800
2,700
9,100
3,150
*When Joyce graduated from college on May 12, 1995, her father gave her 150 shares of Pfizer Corporation stock
that he had acquired on October 27, 1987, for $1,300. At the date of the gift, the fair market value of the stock
was $1,800. In January 2004, 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 percent stock dividend.
3. On May 18, 2018, Joyce purchases a computer system for $2,700. She also buys a
color printer/copier/fax machine for $450. All the equipment is used exclusively
in her business.
4. On June 12, 2018, Joyce sells her old computer system for $300 and her printer
for $75. She had acquired the computer system and printer on February 18, 2015,
for $2,800 and $425, respectively. When the Schnappaufs prepared their 2015 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.
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Appendix A
5. Joyce receives a Schedule K-1 (Exhibit A-16) for her interest in the furniturerestoration 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.
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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Appendix A
Exhibit A-1
a Employee’s social security number
437689
OMB No. 1545-0008
b Employer identification number (EIN)
This information is being furnished to the Internal Revenue Service. If you
are required to file a tax return, a negligence penalty or other sanction
may be imposed on you if this income is taxable and you fail to report it.
2 Federal income tax withheld
1 Wages, tips, other compensation
$13,871.00
$152,272.48
05-7652473
c Employer’s name, address, and ZIP code
3 Social security wages
4 Social security tax withheld
$128,400.00
USC Equipment Corp.
18 Perry Rd.
Warwick, RI 02806
$7,960.80
5 Medicare wages and tips
6 Medicare tax withheld
$152,272.48
$2,207.95
7 Social security tips
8 Allocated tips
9
d Control number
10 Dependent care benefits
150-52-0546
e Employee’s first name and initial
Suff. 11 Nonqualified plans
Last name
13
Bill Schnappauf
27 Northup St.
Wakefield, RI 02879
12a See instructions for box 12
C
o
C
d
e
Statutory
employee
14 Other
Retirement
plan
Third-party
sick pay
12b
C
o
D
d
X
e
$132.48
$6,860.00
12c
C
o
d
e
12d
C
o
d
e
f Employee’s address and ZIP code
15 State
RI
Form
Employer’s state ID number
05-R7652473
W-2
16 State wages, tips, etc.
17 State income tax
$152,272.48
Wage and Tax
Statement
Copy C—For EMPLOYEE’S RECORDS (See Notice to
Employee on the back of Copy B.)
18 Local wages, tips, etc.
19 Local income tax
20 Locality name
$5,577.18
2018
Instructions for Employee (Also see Notice to Employee, on the back of Copy B.)
Department of the Treasury—Internal Revenue Service
Safe, accurate,
FAST! Use
E—Elective deferrals under a section 403(b) salary reduction agreement
Box 1. Enter this amount on the wages line of your tax return.
F—Elective deferrals under a section 408(k)(6) salary reduction SEP
Box 2. Enter this amount on the federal income tax withheld line of your tax return.
G—Elective deferrals and employer contributions (including nonelective deferrals) to a section 457(b) deferred
compensation plan
Box 5. You may be required to report this amount on Form 8959, Additional Medicare Tax. See the Form 1040
instructions to determine if you are required to complete Form 8959.
Box 6. This amount includes the 1.45% Medicare Tax withheld on all Medicare wages and tips shown in box 5, as
well as the 0.9% Additional Medicare Tax on any of those Medicare wages and tips above $200,000.
Box 8. This amount is not included in boxes 1, 3, 5, or 7. For information on how to report tips on your tax return,
see your Form 1040 instructions.
You must file Form 4137, Social Security and Medicare Tax on Unreported Tip Income, with your income tax return
to report at least the allocated tip amount unless you can prove that you received a smaller amount. If you have
records that show the actual amount of tips you received, report that amount even if it is more or less than the
allocated tips. On Form 4137 you will calculate the social security and Medicare tax owed on the allocated tips
shown on your Form(s) W-2 that you must report as income and on other tips you did not report to your employer.
By filing Form 4137, your social security tips will be credited to your social security record (used to figure your
benefits).
Box 9. If you are e-filing and if there is a code in this box, enter it when prompted by your software. This code
assists the IRS in validating the W-2 data submitted with your return. The code is not entered on paper-filed returns.
Box 10. This amount includes the total dependent care benefits that your employer paid to you or incurred on your
behalf (including amounts from a section 125 (cafeteria) plan). Any amount over $5,000 is also included in box 1.
Complete Form 2441, Child and Dependent Care Expenses, to compute any taxable and nontaxable amounts.
Box 11. This amount is (a) reported in box 1 if it is a distribution made to you from a nonqualified deferred
compensation or nongovernmental section 457(b) plan, or (b) included in box 3 and/or 5 if it is a prior year deferral
under a nonqualified or section 457(b) plan that became taxable for social security
and Medicare taxes this year because there is no longer a substantial risk of forfeiture of your right to the deferred
amount. This box shouldn’t be used if you had a deferral and a distribution in the same calendar year. If you made a
deferral and received a distribution in the same calendar year, and you are or will be age 62 by the end of the
calendar year, your employer should file Form SSA-131, Employer Report of Special Wage Payments, with the
Social Security Administration and give you a copy.
Box 12. The following list explains the codes shown in box 12. You may need this information to complete your tax
return. Elective deferrals (codes D, E, F, and S) and designated Roth contributions (codes AA, BB, and EE) under
all plans are generally limited to a total of $18,000 ($12,500 if you only have SIMPLE plans; $21,000 for section
403(b) plans if you qualify for the 15-year rule explained in Pub. 571). Deferrals under code G are limited to
$18,000. Deferrals under code H are limited to $7,000.
However, if you were at least age 50 in 2017, your employer may have allowed an additional deferral of up to
$6,000 ($3,000 for section 401(k)(11) and 408(p) SIMPLE plans). This additional deferral amount is not subject to
the overall limit on elective deferrals. For code G, the limit on elective deferrals may be higher for the last 3 years
before you reach retirement age. Contact your plan administrator for more information. Amounts in excess of the
overall elective deferral limit must be included in income. See the “Wages, Salaries, Tips, etc.” line instructions for
Form 1040.
Note: If a year follows code D through H, S, Y, AA, BB, or EE, you made a make-up pension contribution for a prior
year(s) when you were in military service. To figure whether you made excess deferrals, consider these amounts
for the year shown, not the current year. If no year is shown, the contributions are for the current year.
A—Uncollected social security or RRTA tax on tips. Include this tax on Form 1040. See “Other Taxes” in the Form
1040 instructions.
B—Uncollected Medicare tax on tips. Include this tax on Form 1040. See “Other Taxes” in the Form 1040
instructions.
C—Taxable cost of group-term life insurance over $50,000 (included in boxes 1, 3 (up to social security wage
base), and 5)
D—Elective deferrals to a section 401(k) cash or deferred arrangement. Also includes deferrals under a SIMPLE
retirement account that is part of a section 401(k) arrangement.
H—Elective deferrals to a section 501(c)(18)(D) tax-exempt organization plan. See “Adjusted Gross Income” in the
Form 1040 instructions for how to deduct.
J—Nontaxable sick pay (information only, not included in boxes 1, 3, or 5)
K—20% excise tax on excess golden parachute payments. See “Other Taxes” in the Form 1040 instructions.
L—Substantiated employee business expense reimbursements (nontaxable)
M—Uncollected social security or RRTA tax on taxable cost of group-term life insurance over $50,000 (former
employees only). See “Other Taxes” in the Form 1040 instructions.
N—Uncollected Medicare tax on taxable cost of group-term life insurance over $50,000 (former employees only).
See “Other Taxes” in the Form 1040 instructions.
P—Excludable moving expense reimbursements paid directly to employee (not included in boxes 1, 3, or 5)
Q—Nontaxable combat pay. See the instructions for Form 1040 or Form 1040A for details on reporting this amount.
R—Employer contributions to your Archer MSA. Report on Form 8853, Archer MSAs and Long-Term Care
Insurance Contracts.
S—Employee salary reduction contributions under a section 408(p) SIMPLE plan (not included in box 1)
T—Adoption benefits (not included in box 1). Complete Form 8839, Qualified Adoption Expenses, to compute any
taxable and nontaxable amounts.
V—Income from exercise of nonstatutory stock option(s) (included in boxes 1, 3 (up to social security wage base),
and 5). See Pub. 525, Taxable and Nontaxable Income, for reporting requirements.
W—Employer contributions (including amounts the employee elected to contribute using a section 125 (cafeteria)
plan) to your health savings account. Report on Form 8889, Health Savings Accounts (HSAs).
Y—Deferrals under a section 409A nonqualified deferred compensation plan
Z—Income under a nonqualified deferred compensation plan that fails to satisfy section 409A. This amount is also
included in box 1. It is subject to an additional 20% tax plus interest. See “Other Taxes” in the Form 1040
instructions.
AA—Designated Roth contributions under a section 401(k) plan
BB—Designated Roth contributions under a section 403(b) plan
DD—Cost of employer-sponsored health coverage. The amount reported with Code DD is not taxable.
EE—Designated Roth contributions under a governmental section 457(b) plan. This amount does not apply to
contributions under a tax-exempt organization section 457(b) plan.
FF—Permitted benefits under a qualified small employer health reimbursement arrangement
Box 13. If the “Retirement plan” box is checked, special limits may apply to the amount of traditional IRA
contributions you may deduct. See Pub. 590-A, Contributions to Individual Retirement Arrangements (IRAs).
Box 14. Employers may use this box to report information such as state disability insurance taxes withheld, union
dues, uniform payments, health insurance premiums deducted, nontaxable income, educational assistance
payments, or a member of the clergy’s parsonage allowance and utilities. Railroad employers use this box to report
railroad retirement (RRTA) compensation, Tier 1 tax, Tier 2 tax, Medicare tax and Additional Medicare Tax. Include
tips reported by the employee to the employer in railroad retirement (RRTA) compensation.
Note: Keep Copy C of Form W-2 for at least 3 years after the due date for filing your income tax return. However,
keep Copy C until you begin receiving social security benefits, just
to help
in case there is a question about your work record and/or earnings in a particular year.
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-9
Appendix A
Exhibit A-2
CORRECTED (if checked)
PAYER’S name, street address, city or town, state or province, country, ZIP
or foreign postal code, and telephone no.
Wakefield Savings Bank
565 Main St.
Wakefield, RI 02879
$
Form 1099-INT
615.00
2 Early withdrawal penalty
Copy B
$
For Recipient
3 Interest on U.S. Savings Bonds and Treas. obligations
150-52-0546
$
This is important tax
information and is
$
being furnished to the
Internal Revenue
7 Foreign country or U.S. possession
Service. If you are
required to file a
9 Specified private activity bond
return, a negligence
interest
penalty or other
sanction may be
$
imposed on you if
11 Bond premium
this income is
taxable and the IRS
determines that it has
$
not been reported.
4 Federal income tax withheld 5 Investment expenses
RECIPIENT’S name
$
Bill & Joyce Schnappauf
6 Foreign tax paid
$
Street address (including apt. no.)
8 Tax-exempt interest
27 Northup St.
City or town, state or province, country, and ZIP or foreign postal code
$
10 Market discount
Wakefield, RI 02879
FATCA filing
requirement
Account number (see instructions)
$
12 Bond premium on Treasury obligations 13 Bond premium on tax-exempt bond
$
$
14 Tax-exempt and tax credit
bond CUSIP no.
15 State 16 State identification no. 17 State tax withheld
$
$
120356
Form 1099-INT
Interest
Income
2018
1 Interest income
PAYER’S federal identification number RECIPIENT’S identification number
05-2217118
OMB No. 1545-0112
Payer’s RTN (optional)
(keep for your records)
www.irs.gov/form1099int
Instructions for Recipient
The information provided may be different for covered and noncovered securities. For a description of covered
securities, see the Instructions for Form 8949. For a taxable covered security acquired at a premium, unless you
notified the payer in writing in accordance with Regulations section 1.6045-1(n)(5) that you did not want to amortize
the premium under section 171, or for a tax-exempt covered security acquired at a premium, your payer may report
either (1) a net amount of interest that reflects the offset of the amount of interest paid to you by the amount of
premium amortization allocable to the payment(s), or (2) a gross amount for both the interest paid to you and the
premium amortization allocable to the payment(s). If you did notify your payer that you did not want to amortize the
premium on a taxable covered security, then your payer will only report the gross amount of interest paid to you.
For a noncovered security acquired at a premium, your payer is only required to report the gross amount of interest
paid to you.
Recipient’s identification number. For your protection, this form may show only the last four digits of your social
security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number
(ATIN), or employer identification number (EIN). However, the issuer has reported your complete identification
number to the IRS.
FATCA filing requirement. If the FATCA filing requirement box is checked, the payer is reporting on this Form
1099 to satisfy its chapter 4 account reporting requirement. You also may have a filing requirement. See the
Instructions for Form 8938.
Account number. May show an account or other unique number the payer assigned to distinguish your account.
Box 1. Shows taxable interest paid to you during the calendar year by the payer. This does not include interest
shown in box 3. May also show the total amount of the credits from clean renewable energy bonds, new clean
renewable energy bonds, qualified energy conservation bonds, qualified zone academy bonds, qualified school
construction bonds, and build America bonds that must be included in your interest income. These amounts were
treated as paid to you during 2016 on the credit allowance dates (March 15, June 15, September 15, and
December 15). For more information, see Form 8912. See the instructions above for a taxable covered security
acquired at a premium.
Box 2. Shows interest or principal forfeited because of early withdrawal of time savings. You may deduct this
amount to figure your adjusted gross income on your income tax return. See the Instructions for Form 1040 to see
where to take the deduction.
Box 3. Shows interest on U.S. Savings Bonds, Treasury bills, Treasury bonds, and Treasury notes. This may or
may not all be taxable. See Pub. 550. This interest is exempt from state and local income taxes. This interest is not
included in box 1. See the instructions above for a taxable covered security acquired at a premium.
Box 4. Shows backup withholding. Generally, a payer must backup withhold if you did not furnish your taxpayer
identification number (TIN) or you did not furnish the correct TIN to the payer. See Form W-9. Include this amount
on your income tax return as tax withheld.
Box 5. Any amount shown is your share of investment expenses of a single-class REMIC. If you file Form 1040,
you may deduct these expenses on the “Other expenses” line of Schedule A (Form 1040) subject to the 2% limit.
This amount is included in box 1.
Box 6. Shows foreign tax paid. You may be able to claim this tax as a deduction or a credit on your Form 1040. See
your Form 1040 instructions.
Box 7. Shows the country or U.S. possession to which the foreign tax was paid.
Box 8. Shows tax-exempt interest paid to you during the calendar year by the payer. Report this amount on line 8b
of Form 1040 or Form 1040A. This amount may be subject to backup withholding. See box 4. See the instructions
above for a tax-exempt covered security acquired at a premium.
Department of the Treasury – Internal Revenue Service
Box 9. Shows tax-exempt interest subject to the alternative minimum tax. This amount is included in box 8. See the
Instructions for Form 6251. See the instructions above for a tax-exempt covered security acquired at a premium.
Box 10. For a taxable or tax-exempt covered security, if you made an election under section 1278(b) to include
market discount in income as it accrues and you notified your payer of the election in writing in accordance with
Regulations section 1.6045-1(n)(5), shows the market discount that accrued on the debt instrument during the year
while held by you, unless it was reported on Form 1099-OID. For a taxable or tax-exempt covered security, accrued
market discount will be calculated on a constant yield basis unless you notified your payer in writing in accordance
with Regulations section 1.6045-1(n)(5) that you did not want to make a constant yield election for market discount
under section 1276(b). Report the accrued market discount on your income tax return as directed in the instructions
for Form 1040 or 1040A. Market discount on a tax-exempt security is includible in taxable income as interest
income.
Box 11. For a taxable covered security (other than a U.S. Treasury obligation), shows the amount of premium
amortization allocable to the interest payment(s), unless you notified the payer in writing in accordance with
Regulations section 1.6045-1(n)(5) that you did not want to amortize bond premium under section 171. If an amount
is reported in this box, see the Instructions for Form 1040 (Schedule B). If an amount is not reported in this box for a
taxable covered security acquired at a premium and the payer is reporting premium amortization, the payer has
reported a net amount of interest in box 1. If the amount in this box is greater than the amount of interest paid on
the covered security, see Regulations section 1.171-2(a)(4).
Box 12. For a U.S. Treasury obligation that is a covered security, shows the amount of premium amortization
allocable to the interest payment(s), unless you notified the payer in writing in accordance with Regulations section
1.6045-1(n)(5) that you did not want to amortize bond premium under section 171. If an amount is reported in this
box, see the Instructions for Form 1040 (Schedule B). If an amount is not reported in this box for a U.S. Treasury
obligation that is a covered security acquired at a premium and the payer is reporting premium amortization, the
payer has reported a net amount of interest in box 3. If the amount in this box is greater than the amount of interest
paid on the U.S. Treasury obligation, see Regulations section 1.171-2(a)(4).
Box 13. For a tax-exempt covered security, shows the amount of premium amortization allocable to the interest
payment(s). If an amount is not reported in this box for a tax-exempt covered security acquired at a premium, the
payer has reported a net amount of interest in box 8 or 9, whichever is applicable. If the amount in this box is
greater than the amount of interest paid on the tax-exempt covered security, the excess is a nondeductible loss.
See Regulations section 1.171-2(a)(4)(ii).
Box 14. Shows CUSIP number(s) for tax-exempt bond(s) on which tax-exempt interest was paid, or tax credit
bond(s) on which taxable interest was paid or tax credit was allowed, to you during the calendar year. If blank, no
CUSIP number was issued for the bond(s).
Boxes 15—17. State tax withheld reporting boxes.
Nominees. If this form includes amounts belonging to another person(s), you are considered a nominee recipient.
Complete a Form 1099-INT for each of the other owners showing the income allocable to each. File Copy A of the
form with the IRS. Furnish Copy B to each owner. List yourself as the “payer” and the other owner(s) as the
“recipient.” File Form(s) 1099-INT with Form 1096 with the Internal Revenue Service Center for your area. On Form
1096 list yourself as the “filer.” A spouse is not required to file a nominee return to show amounts owned by the
other spouse.
Future developments. For the latest information about developments related to Form 1099-INT and its
instructions, such as legislation enacted after they were published, go to www.irs.gov/form1099int.
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-10
Appendix A
Exhibit A-3
CORRECTED (if checked)
PAYER’S name, street address, city or town, state or province, country, ZIP
or foreign postal code, and telephone no.
Hawthorn Savings Bank
11 Vespa Plaza
Boston, MA 02211
OMB No. 1545-0112
Payer’s RTN (optional)
Interest
Income
2018
1 Interest income
$ 417.00
Form 1099-INT
2 Early withdrawal penalty
PAYER’S federal identification number RECIPIENT’S identification number
05-8173693
317-42-5207
$
For Recipient
3 Interest on U.S. Savings Bonds and Treas. obligations
$
This is important tax
information and is
$
being furnished to the
Internal Revenue
7 Foreign country or U.S. possession
Service. If you are
required to file a
9 Specified private activity bond
return, a negligence
interest
penalty or other
sanction may be
$
imposed on you if
11 Bond premium
this income is
taxable and the IRS
determines that it has
$
not been reported.
4 Federal income tax withheld 5 Investment expenses
RECIPIENT’S name
$
Joyce Schnappauf
6 Foreign tax paid
$
Street address (including apt. no.)
27 Northup St.
8 Tax-exempt interest
City or town, state or province, country, and ZIP or foreign postal code
FATCA filing
requirement
Account number (see instructions)
471938
(keep for your records)
$
10 Market discount
Wakefield, RI 02879
Form 1099-INT
Copy B
$
12 Bond premium on Treasury obligations 13 Bond premium on tax-exempt bond
$
$
14 Tax-exempt and tax credit
bond CUSIP no.
15 State 16 State identification no. 17 State tax withheld
www.irs.gov/form1099int
$
$
Department of the Treasury – Internal Revenue Service
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-11
Appendix A
Exhibit A-4
CORRECTED (if checked)
PAYER’S name, street address, city or town, state or province, country, ZIP
or foreign postal code, and telephone no.
1a Total ordinary dividends
$
Collingwood Capital Fund
100 American Avenue
Providence, RI 02902
2018
176.00
1b Qualified dividends
$
176.00
2a Total capital gain distr.
$
PAYER’S federal identification number RECIPIENT’S identification number
05-1473191
OMB No. 1545-0110
317-42-5207
RECIPIENT’S name
Joyce Schnappauf
105.00
2c Section 1202 gain
Form
Dividends and
Distributions
1099-DIV
2b Unrecap. Sec. 1250 gain
$
$
4 Federal income tax withheld
$
$
47.20
5 Investment expenses
$
6 Foreign tax paid
27 Northup St.
City or town, state or province, country, and ZIP or foreign postal code
Wakefield, RI 02879
$
9 Noncash liquidation distributions
$
FATCA filing 10 Exempt-interest dividends
requirement
$
Account number (see instructions)
7 Foreign country or U.S. possession
$
8 Cash liquidation distributions
For Recipient
2d Collectibles (28%) gain
3 Nondividend distributions
Street address (including apt. no.)
Copy B
$
11 Specified private activity
bond interest dividends
This is important tax
information and is
being furnished to
the Internal Revenue
Service. If you are
required to file a
return, a negligence
penalty or other
sanction may be
imposed on you if
this income is taxable
and the IRS
determines that it has
not been reported.
$
12 State
13 State identification no. 14 State tax withheld
$
$
Form 1099-DIV
(keep for your records)
Instructions for Recipient
Recipient’s identification number. For your protection, this form may show
only the last four digits of your social security number (SSN), individual taxpayer
identification number (ITIN), adoption taxpayer identification number (ATIN), or
employer identification number (EIN). However, the issuer has reported your
complete identification number to the IRS.
FATCA filing requirement. If the FATCA filing requirement box is checked, the
payer is reporting on this Form 1099 to satisfy its chapter 4 account reporting
requirement. You also may have a filing requirement. See the Instructions for
Form 8938.
Account number. May show an account or other unique number the payer
assigned to distinguish your account.
Box 1a. Shows total ordinary dividends that are taxable. Include this amount on
line 9a of Form 1040 or 1040A. Also, report it on Schedule B (1040A or 1040), if
required.
Box 1b. Shows the portion of the amount in box 1a that may be eligible for
reduced capital gains rates. See Form 1040/1040A instructions for how to
determine this amount. Report the eligible amount on line 9b, Form 1040 or
1040A.
The amount shown may be dividends a corporation paid directly to you as a
participant (or beneficiary of a participant) in an employee stock ownership plan
(ESOP). Report it as a dividend on your Form 1040/1040A but treat it as a plan
distribution, not as investment income, for any other purpose.
Box 2a. Shows total capital gain distributions from a regulated investment
company or real estate investment trust. Report the amounts shown in box 2a
on Schedule D (Form 1040), line 13. But, if no amount is shown in boxes 2c–2d
and your only capital gains and losses are capital gain distributions, you may be
able to report the amounts shown in box 2a on line 13 of Form 1040 (line 10 of
Form 1040A) rather than Schedule D. See the Form 1040/1040A instructions.
www.irs.gov/form1099div
Department of the Treasury – Internal Revenue Service
Box 3. Shows the part of the distribution that is nontaxable because it is a return
of your cost (or other basis). You must reduce your cost (or other basis) by this
amount for figuring gain or loss when you sell your stock. But if you get back all
your cost (or other basis), report future distributions as capital gains. See Pub.
550.
Box 4. Shows backup withholding. A payer must backup withhold on certain
payments if you did not give your taxpayer identification number to the payer.
See Form W-9, Request for Taxpayer Identification Number and Certification, for
information on backup withholding. Include this amount on your income tax
return as tax withheld.
Box 5. Shows your share of expenses of a nonpublicly offered regulated
investment company, generally a nonpublicly offered mutual fund. If you file
Form 1040, you may deduct these expenses on the “Other expenses” line on
Schedule A (Form 1040) subject to the 2% limit. This amount is included in
box 1a.
Box 6. Shows the foreign tax that you may be able to claim as a deduction or a
credit on Form 1040. See the Form 1040 instructions.
Box 7. This box should be left blank if a regulated investment company reported
the foreign tax shown in box 6.
Boxes 8 and 9. Shows cash and noncash liquidation distributions.
Box 10. Shows exempt-interest dividends from a mutual fund or other regulated
investment company paid to you during the calendar year. Include this amount
on line 8b of Form 1040 or 1040A as tax-exempt interest. This amount may be
subject to backup withholding. See box 4.
Box 11. Shows exempt-interest dividends subject to the alternative minimum
tax. This amount is included in box 10. See the Instructions for Form 6251.
Boxes 12–14. State income tax withheld reporting boxes.
Box 2b. Shows the portion of the amount in box 2a that is unrecaptured section
1250 gain from certain depreciable real property. Report this amount on the
Unrecaptured Section 1250 Gain Worksheet—Line 19 in the Schedule D
instructions (Form 1040).
Nominees. If this form includes amounts belonging to another person, you are
considered a nominee recipient. You must file Form 1099-DIV (with a
Form 1096) with the IRS for each of the other owners to show their share of the
income, and you must furnish a Form 1099-DIV to each. A spouse is not
required to file a nominee return to show amounts owned by the other spouse.
See the 2016 General Instructions for Certain Information Returns.
Box 2c. Shows the portion of the amount in box 2a that is section 1202 gain
from certain small business stock that may be subject to an exclusion. See the
Schedule D (Form 1040) instructions.
Future developments. For the latest information about the developments
related to Form 1099-DIV and its instructions, such as legislation enacted after
they were published, go to www.irs.gov/form1099div.
Box 2d. Shows 28% rate gain from sales or exchanges of collectibles. If
required, use this amount when completing the 28% Rate Gain Worksheet—
Line 18 in the instructions for Schedule D (Form 1040).
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-12
Appendix A
Exhibit A-5
CORRECTED (if checked)
PAYER’S name, street address, city or town, state or province, country, ZIP
or foreign postal code, and telephone no.
$
Coca-Cola Corporation
125 Beltway Blvd.
Atlanta, GA 30313
OMB No. 1545-0110
2018
1,372.00
1b Qualified dividends
$
PAYER’S federal identification number RECIPIENT’S identification number
05-6179147
1a Total ordinary dividends
1,372.00
Form
Dividends and
Distributions
1099-DIV
2a Total capital gain distr.
2b Unrecap. Sec. 1250 gain
$
$
2c Section 1202 gain
2d Collectibles (28%) gain
Copy B
For Recipient
150-52-0546
RECIPIENT’S name
Bill Schnappauf
$
$
3 Nondividend distributions
4 Federal income tax withheld
$
$
5 Investment expenses
$
Street address (including apt. no.)
6 Foreign tax paid
27 Northup St.
City or town, state or province, country, and ZIP or foreign postal code
$
8 Cash liquidation distributions
Wakefield, RI 02879
$
9 Noncash liquidation distributions
$
FATCA filing 10 Exempt-interest dividends
requirement
$
Account number (see instructions)
7 Foreign country or U.S. possession
11 Specified private activity
bond interest dividends
This is important tax
information and is
being furnished to
the Internal Revenue
Service. If you are
required to file a
return, a negligence
penalty or other
sanction may be
imposed on you if
this income is taxable
and the IRS
determines that it has
not been reported.
$
12 State
13 State identification no. 14 State tax withheld
$
$
Form 1099-DIV
(keep for your records)
www.irs.gov/form1099div
Department of the Treasury – Internal Revenue Service
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-13
Appendix A
Exhibit A-6
Pebble Beach Investors
175 Norman Way
Monterey, CA 95436
Forms 1099 for 2018
This is important tax information and is being furnished to the Internal Revenue Service. We
are required to report, on Forms 1099, all dividends, interest, royalties and proceeds on sales
collected on your behalf. A negligence penalty will be imposed if this income is taxable and
the Internal Revenue Service determines that it has not been reported.
1099-DIV Dividends
This section reports dividends and distributions earned on investments and any taxes withheld
or paid. All dividends are eligible dividend income.
Entity
Pfizer Corporation
Apple
Description
Amount
Federal Tax
Withheld
Gross dividends
Gross dividends
$210
$391
$0
$0
1099-INT Interest
This section reports interest earned on investments and any taxes withheld or paid.
Entity
New Jersey Economic Development Bonds
New York City Municipal Bonds
Ford Motor Bonds
Description
Amount
Federal Tax
Withheld
Gross interest
Gross interest
Gross interest
$ 457
$1,208
$ 717
$ 0
$ 0
$144
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
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A-14
Appendix A
Exhibit A-7
8
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-15
Appendix A
Exhibit A-8
8
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-16
Appendix A
Exhibit A-9
June 15, 2018
United Insurance Corporation
150 Hird Highway
Essedon, Connecticut 06457
Re: Policy # SB 6996782
Dear Mr. Schnappauf:
Enclosed please find a check for $15,480. The enclosed check consists of the
face value of the insurance policy ($15,100) plus the accrued interest from
the date of your uncle’s death. The interest income of $380 is calculated beginning 15 days after the death (December 17, 2016) through the payment
date of June 15, 2018. The premiums paid on this policy total $3,620. A portion of the payment you receive may be taxable. We suggest you contact your
tax advisor to determine the appropriate tax treatment of the payment.
If you have any questions concerning the payment, please feel free to contact
me at (203) 591-4359.
Sincerely,
Kathy Sorento
Policy Manager
————————————SUBSTITUTE 1099-INT———————————-
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-17
Appendix A
Exhibit A-10
CORRECTED (if checked)
1 Rents
PAYER’S name, street address, city or town, state or province, country, ZIP
or foreign postal code, and telephone no.
2018
$
West Publishing
457 Gorman Way
St. Paul, MN 54678
2 Royalties
$ 5,170.00
05-1919431
Miscellaneous
Income
Form 1099-MISC
3 Other income
4 Federal income tax withheld
$
$
5 Fishing boat proceeds
6 Medical and health care payments
$
$
7 Nonemployee compensation
8 Substitute payments in lieu of
dividends or interest
$
$
PAYER’S federal identification number RECIPIENT’S identification number
Copy B
For Recipient
317-42-5207
RECIPIENT’S name
Joyce Schnappauf
Street address (including apt. no.)
9 Payer made direct sales of
10 Crop insurance proceeds
$5,000 or more of consumer
products to a buyer
$
(recipient) for resale
27 Northup St.
City or town, state or province, country, and ZIP or foreign postal code
Wakefield, RI 02879
Account number (see instructions)
FATCA filing
requirement
11
12
13 Excess golden parachute
payments
14 Gross proceeds paid to an
attorney
$
15a Section 409A deferrals
15b Section 409A income
$
$
Form 1099-MISC
OMB No. 1545-0115
(keep for your records)
$
16 State tax withheld
$
$
17 State/Payer’s state no.
This is important tax
information and is
being furnished to
the Internal Revenue
Service. If you are
required to file a
return, a negligence
penalty or other
sanction may be
imposed on you if
this income is
taxable and the IRS
determines that it
has not been
reported.
18 State income
$
$
www.irs.gov/form1099misc
Department of the Treasury – Internal Revenue Service
Instructions for Recipient
Recipient’s identification number. For your protection, this form may show only the
last four digits of your social security number (SSN), individual taxpayer identification
number (ITIN), adoption taxpayer identification number (ATIN), or employer
identification number (EIN). However, the issuer has reported your complete
identification number to the IRS.
Account number. May show an account or other unique number the payer assigned
to distinguish your account.
FATCA filing requirement. If the FATCA filing requirement box is checked, the payer
is reporting on this Form 1099 to satisfy its chapter 4 account reporting requirement.
You also may have a filing requirement. See the Instructions for Form 8938.
Amounts shown may be subject to self-employment (SE) tax. If your net income
from self-employment is $400 or more, you must file a return and compute your SE tax
on Schedule SE (Form 1040). See Pub. 334 for more information. If no income or
social security and Medicare taxes were withheld and you are still receiving these
payments, see Form 1040-ES (or Form 1040-ES(NR)). Individuals must report these
amounts as explained in the box 7 instructions on this page. Corporations, fiduciaries,
or partnerships must report the amounts on the proper line of their tax returns.
Form 1099-MISC incorrect? If this form is incorrect or has been issued in error,
contact the payer. If you cannot get this form corrected, attach an explanation to your
tax return and report your income correctly.
Box 1. Report rents from real estate on Schedule E (Form 1040). However, report rents
on Schedule C (Form 1040) if you provided significant services to the tenant, sold real
estate as a business, or rented personal property as a business.
Box 2. Report royalties from oil, gas, or mineral properties, copyrights, and patents on
Schedule E (Form 1040). However, report payments for a working interest as explained
in the box 7 instructions. For royalties on timber, coal, and iron ore, see Pub. 544.
Box 3. Generally, report this amount on the “Other income” line of Form 1040 (or Form
1040NR) and identify the payment. The amount shown may be payments received as
the beneficiary of a deceased employee, prizes, awards, taxable damages, Indian
gaming profits, or other taxable income. See Pub. 525. If it is trade or business
income, report this amount on Schedule C or F (Form 1040).
Box 4. Shows backup withholding or withholding on Indian gaming profits. Generally,
a payer must backup withhold if you did not furnish your taxpayer identification
number. See Form W-9 and Pub. 505 for more information. Report this amount on
your income tax return as tax withheld.
Box 5. An amount in this box means the fishing boat operator considers you selfemployed. Report this amount on Schedule C (Form 1040). See Pub. 334.
Box 6. For individuals, report on Schedule C (Form 1040).
Box 7. Shows nonemployee compensation. If you are in the trade or business of
catching fish, box 7 may show cash you received for the sale of fish. If the amount in
this box is SE income, report it on Schedule C or F (Form 1040), and complete
Schedule SE (Form 1040). You received this form instead of Form W-2 because the
payer did not consider you an employee and did not withhold income tax or social
security and Medicare tax. If you believe you are an employee and cannot get the
payer to correct this form, report the amount from box 7 on Form 1040, line 7 (or Form
1040NR, line 8). You must also complete Form 8919 and attach it to your return. If you
are not an employee but the amount in this box is not SE income (for example, it is
income from a sporadic activity or a hobby), report it on Form 1040, line 21 (or Form
1040NR, line 21).
Box 8. Shows substitute payments in lieu of dividends or tax-exempt interest received
by your broker on your behalf as a result of a loan of your securities. Report on the
“Other income” line of Form 1040 (or Form 1040NR).
Box 9. If checked, $5,000 or more of sales of consumer products was paid to you on a
buy-sell, deposit-commission, or other basis. A dollar amount does not have to be
shown. Generally, report any income from your sale of these products on Schedule C
(Form 1040).
Box 10. Report this amount on Schedule F (Form 1040).
Box 13. Shows your total compensation of excess golden parachute payments
subject to a 20% excise tax. See the Form 1040 (or Form 1040NR) instructions for
where to report.
Box 14. Shows gross proceeds paid to an attorney in connection with legal services.
Report only the taxable part as income on your return.
Box 15a. May show current year deferrals as a nonemployee under a nonqualified
deferred compensation (NQDC) plan that is subject to the requirements of section
409A, plus any earnings on current and prior year deferrals.
Box 15b. Shows income as a nonemployee under an NQDC plan that does not meet
the requirements of section 409A. This amount is also included in box 7 as
nonemployee compensation. Any amount included in box 15a that is currently taxable
is also included in this box. This income is also subject to a substantial additional tax
to be reported on Form 1040 (or Form 1040NR). See “Total Tax” in the Form 1040 (or
Form 1040NR) instructions.
Boxes 16–18. Shows state or local income tax withheld from the payments.
Future developments. For the latest information about developments related to Form
1099-MISC and its instructions, such as legislation enacted after they were published,
go to www.irs.gov/form1099misc.
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-18
Appendix A
Exhibit A-11
CORRECTED (if checked)
PAYER’S name, street address, city or town, state or province, country, ZIP
or foreign postal code, and telephone no.
1 Rents
OMB No. 1545-0115
2018
$
Mountain Publishing
480 Payton Lane
Dallas, TX 72194
2 Royalties
PAYER’S federal identification number RECIPIENT’S identification number
05-9765421
Miscellaneous
Income
$ 6,250.00
Form 1099-MISC
3 Other income
4 Federal income tax withheld
$
$
5 Fishing boat proceeds
6 Medical and health care payments
$
$
7 Nonemployee compensation
8 Substitute payments in lieu of
dividends or interest
$
$
Copy B
For Recipient
317-42-5207
RECIPIENT’S name
Joyce Schnappauf
Street address (including apt. no.)
27 Northup St.
City or town, state or province, country, and ZIP or foreign postal code
Wakefield, RI 02879
Account number (see instructions)
FATCA filing
requirement
9 Payer made direct sales of
10 Crop insurance proceeds
$5,000 or more of consumer
products to a buyer
$
(recipient) for resale
11
12
13 Excess golden parachute
payments
14 Gross proceeds paid to an
attorney
$
15a Section 409A deferrals
$
15b Section 409A income
$
Form 1099-MISC
(keep for your records)
16 State tax withheld
$
$
www.irs.gov/form1099misc
$
17 State/Payer’s state no.
This is important tax
information and is
being furnished to
the Internal Revenue
Service. If you are
required to file a
return, a negligence
penalty or other
sanction may be
imposed on you if
this income is
taxable and the IRS
determines that it
has not been
reported.
18 State income
$
$
Department of the Treasury – Internal Revenue Service
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-19
Appendix A
Exhibit A-12
CORRECTED (if checked)
PAYER’S name, street address, city or town, state or province, country, ZIP
or foreign postal code, and telephone no.
1 Rents
2 Royalties
$ 11,200.00
PAYER’S federal identification number RECIPIENT’S identification number
05-1719274
Form 1099-MISC
3 Other income
4 Federal income tax withheld
$
$
5 Fishing boat proceeds
6 Medical and health care payments
$
$
7 Nonemployee compensation
8 Substitute payments in lieu of
dividends or interest
$
$
Joyce Schnappauf
Street address (including apt. no.)
27 Northup St.
City or town, state or province, country, and ZIP or foreign postal code
Wakefield, RI 02879
Account number (see instructions)
FATCA filing
requirement
9 Payer made direct sales of
10 Crop insurance proceeds
$5,000 or more of consumer
products to a buyer
$
(recipient) for resale
11
12
13 Excess golden parachute
payments
14 Gross proceeds paid to an
attorney
$
15b Section 409A income
$
Form 1099-MISC
Miscellaneous
Income
Copy B
For Recipient
317-42-5207
RECIPIENT’S name
$
2018
$
Head Start Books
647 Fifth Avenue
New York, NY 11140
15a Section 409A deferrals
OMB No. 1545-0115
(keep for your records)
16 State tax withheld
$
$
www.irs.gov/form1099misc
$
17 State/Payer’s state no.
This is important tax
information and is
being furnished to
the Internal Revenue
Service. If you are
required to file a
return, a negligence
penalty or other
sanction may be
imposed on you if
this income is
taxable and the IRS
determines that it
has not been
reported.
18 State income
$
$
Department of the Treasury – Internal Revenue Service
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-20
Appendix A
Exhibit A-13
CORRECTED (if checked)
RECIPIENT’S/LENDER’S name, street address, city or town, state or
province, country, ZIP or foreign postal code, and telephone no.
Jefferson Trust
50 Presidential Avenue
Falmouth, RI 02458
*Caution: The amount shown may OMB No. 1545-0901
not be fully deductible by you.
Limits based on the loan amount
and the cost and value of the
secured property may apply. Also,
you may only deduct interest to the
(Rev. July 2016)
extent it was incurred by you,
actually paid by you, and not
reimbursed by another person.
Form 1098
2018
1 Mortgage interest received from payer(s)/borrower(s)*
$ 8,140.00
RECIPIENT’S/LENDER’S federal
identification number
PAYER’S/BORROWER’S taxpayer
identification no.
05-6771794
150-54-0546
PAYER’S/BORROWER’S name
Bill & Joyce Schnappauf
Street address (including apt. no.)
27 Northup St.
City or town, state or province, country, and ZIP or foreign postal code
Wakefield, RI 02879
10 Other
Account number (see instructions)
2 Outstanding mortgage
principal as of 1/1/2018
3 Mortgage origination date
Mortgage
Interest
Statement
Copy B
For Payer/
Borrower
The information in boxes 1
through 9 is important tax
information and is being
furnished to the Internal
$
$
Revenue Service. If you are
6 Points paid on purchase of principal residence
required to file a return, a
negligence penalty or other
$
sanction may be imposed
7 Is address of property securing mortgage same as
on you if the IRS determines
PAYER’S/BORROWER’S address?
that an underpayment of
If Yes, box is checked . . . . . . . . .
tax results because you
If No, see box 8 or 9, below
overstated a deduction
for this mortgage interest
8 Address of property securing mortgage
or for these points, reported
in boxes 1 and 6; or
because you didn’t report
the refund of interest
9 If property securing mortgage has no address, below is the
(box 4); or because you
description of the property
claimed a non-deductible
item.
$
4 Refund of overpaid
interest
5 Mortgage insurance
premiums
46861025
Form 1098
(Keep for your records)
www.irs.gov/form1098
Department of the Treasury – Internal Revenue Service
Instructions for Payer/Borrower
A person (including a financial institution, a governmental unit, and a cooperative
housing corporation) who is engaged in a trade or business and, in the course of
such trade or business, received from you at least $600 of mortgage interest
(including certain points) on any one mortgage in the calendar year must furnish
this statement to you.
If you received this statement as the payer of record on a mortgage on which
there are other borrowers, furnish each of the other borrowers with information
about the proper distribution of amounts reported on this form. Each borrower is
entitled to deduct only the amount he or she paid and points paid by the seller
that represent his or her share of the amount allowable as a deduction. Each
borrower may have to include in income a share of any amount reported in box 3.
If your mortgage payments were subsidized by a government agency, you
may not be able to deduct the amount of the subsidy. See the instructions for
Form 1040, Schedule A, C, or E for how to report the mortgage interest. Also,
for more information, see Pub. 936 and Pub. 535.
Payer’s/Borrower’s taxpayer identification number. For your protection, this
form may show only the last four digits of your SSN, ITIN, ATIN, or EIN.
However, the issuer has reported your complete identification number to the
IRS.
Account number. May show an account or other unique number the lender has
assigned to distinguish your account.
Box 1. Shows the mortgage interest received by the recipient/lender during the
year. This amount includes interest on any obligation secured by real property,
including a home equity, line of credit, or credit card loan. This amount does not
include points, government subsidy payments, or seller payments on a
“buydown” mortgage. Such amounts are deductible by you only in certain
circumstances. Caution: If you prepaid interest in 2016 that accrued in full by
January 15, 2017, this prepaid interest may be included in box 1. However, you
cannot deduct the prepaid amount in 2016 even though it may be included in
box 1. If you hold a mortgage credit certificate and can claim the mortgage
interest credit, see Form 8396. If the interest was paid on a mortgage, home
equity, line of credit, or credit card loan secured by your personal residence, you
may be subject to a deduction limitation.
Box 2. Shows the outstanding mortgage principal on the mortgage as of
January 1, 2016.
Box 3. Shows the date of the mortgage origination.
Box 4. Do not deduct this amount. It is a refund (or credit) for overpayment(s)
of interest you made in a prior year or years. If you itemized deductions in the
year(s) you paid the interest, you may have to include part or all of the box 4
amount on the “Other income” line of your 2016 Form 1040. No adjustment to
your prior year(s) tax return(s) is necessary. For more information, see Pub. 936
and Itemized Deduction Recoveries in Pub. 525.
Box 5. Shows mortgage insurance premiums which may qualify to be treated as
deductible mortgage interest. See the Schedule A (Form 1040) instructions and
Pub. 936.
Box 6. Not all points are reportable to you. Box 6 shows points you or the seller
paid this year for the purchase of your principal residence that are required to be
reported to you. Generally, these points are fully deductible in the year paid, but
you must subtract seller-paid points from the basis of your residence. Other
points not reported in box 6 may also be deductible. See Pub. 936 to figure the
amount you can deduct.
Box 7. If the address of the property securing the mortgage is the same as
the payer’s/borrower’s, the box will be checked and boxes 8 and 9 will be
blank. If not, either box 8 or 9 will be completed.
Box 8. This is the address of the property securing the mortgage.
Box 9. This is the description of the property securing the mortgage, if box
7 is not checked and box 8 is not completed.
Box 10. The interest recipient may use this box to give you other information,
such as real estate taxes or insurance paid from escrow.
Future developments. For the latest information about developments related to
Form 1098 and its instructions, such as legislation enacted after they were
published, go to www.irs.gov/form1098.
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-21
Appendix A
Exhibit A-14
CORRECTED (if checked)
RECIPIENT’S/LENDER’S name, street address, city or town, state or
province, country, ZIP or foreign postal code, and telephone no.
Jefferson Trust
50 Presidential Avenue
Falmouth, RI 02458
*Caution: The amount shown may OMB No. 1545-0901
not be fully deductible by you.
Limits based on the loan amount
and the cost and value of the
secured property may apply. Also,
you may only deduct interest to the
(Rev. July 2016)
extent it was incurred by you,
actually paid by you, and not
reimbursed by another person.
Form 1098
2018
1 Mortgage interest received from payer(s)/borrower(s)*
$ 5,100.00
RECIPIENT’S/LENDER’S federal
identification number
PAYER’S/BORROWER’S taxpayer
identification no.
05-6771794
150-54-0546
PAYER’S/BORROWER’S name
Bill & Joyce Schnappauf
Street address (including apt. no.)
27 Northup St.
City or town, state or province, country, and ZIP or foreign postal code
Wakefield, RI 02879
10 Other
Account number (see instructions)
2 Outstanding mortgage
principal as of 1/1/2018
3 Mortgage origination date
Mortgage
Interest
Statement
Copy B
For Payer/
Borrower
The information in boxes 1
through 9 is important tax
information and is being
furnished to the Internal
$
$
Revenue Service. If you are
6 Points paid on purchase of principal residence
required to file a return, a
negligence penalty or other
$
sanction may be imposed
7 Is address of property securing mortgage same as
on you if the IRS determines
PAYER’S/BORROWER’S address?
that an underpayment of
If Yes, box is checked . . . . . . . . .
tax results because you
If No, see box 8 or 9, below
overstated a deduction
for this mortgage interest
8 Address of property securing mortgage
or for these points, reported
in boxes 1 and 6; or
because you didn’t report
the refund of interest
9 If property securing mortgage has no address, below is the
(box 4); or because you
description of the property
claimed a non-deductible
item.
$
4 Refund of overpaid
interest
5 Mortgage insurance
premiums
46861025 H
Form 1098
(Keep for your records)
www.irs.gov/form1098
Department of the Treasury – Internal Revenue Service
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-22
Appendix A
Exhibit A-15
CORRECTED (if checked)
PAYER’S name, street address, city or town, state or province, country, ZIP
or foreign postal code, and telephone no.
Pebble Beach Investors
175 Norman Way
Monterey, CA 95436
PAYER’S federal identification number
05-6795137
Applicable check box on Form 8949
2018
Form 1099-B
1b Date acquired
RECIPIENT’S identification number 1d Proceeds
$
41,060.00
1f Accrued market discount
$
Joyce Schnappauf
Long-term gain or loss
Copy B
1e Cost or other basis
$

For Recipient
1g Wash sale loss disallowed
3 If checked, basis reported
to IRS
This is important tax
information and is
being furnished to
the Internal Revenue
Reported to IRS:
7 If checked, loss is not allowed
Service. If you are
based on amount in 1d
required to file a
Gross proceeds
return, a negligence
Net proceeds
penalty or other
Profit or (loss) realized in
9 Unrealized profit or (loss) on
sanction may be
2018 on closed contracts
open contracts—12/31/2017
imposed on you if
this income is
$
taxable and the IRS
Unrealized profit or (loss) on 11 Aggregate profit or (loss)
determines that it
open contracts—12/31/2018
on contracts
has not been
reported.
$
Ordinary
4 Federal income tax withheld 5 If checked, noncovered
security
Street address (including apt. no.)
$
27 Northup St.
6
City or town, state or province, country, and ZIP or foreign postal code
Wakefield, RI 02879
8
Account number (see instructions)
$
FATCA filing
requirement
15 State identification no. 16 State tax withheld
$
$
(Keep for your records)
Form 1099-B
1c Date sold or disposed
$
2 Short-term gain or loss
RECIPIENT’S name
14 State name
Proceeds From
Broker and
Barter Exchange
Transactions
1a Description of property (Example 100 sh. XYZ Co.)
317-42-5207
CUSIP number
OMB No. 1545-0715
Instructions for Recipient
Brokers and barter exchanges must report proceeds from (and in some cases, basis for) transactions to
you and the IRS on Form 1099-B. Reporting is also required when your broker knows or has reason to
know that a corporation in which you own stock has had a reportable change in control or capital
structure. You may be required to recognize gain from the receipt of cash, stock, or other property that
was exchanged for the corporation’s stock. If your broker reported this type of transaction to you, the
corporation is identified in box 1a.
Recipient’s identification number. For your protection, this form may show only the last four digits of
your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer
identification number (ATIN), or employer identification number (EIN). However, the issuer has reported
your complete identification number to the IRS.
Account number. May show an account or other unique number the payer assigned to distinguish your
account.
CUSIP number. Shows the CUSIP (Committee on Uniform Security Identification Procedures) number
or other applicable identifying number.
FATCA filing requirement. If the FATCA filing requirement box is checked, the payer is reporting on
this Form 1099 to satisfy its chapter 4 account reporting requirement. You also may have a filing
requirement. See the Instructions for Form 8938.
Applicable check box on Form 8949. Indicates where to report this transaction on Form 8949 and
Schedule D, and which check box is applicable. See the instructions for your Schedule D and/or Form
8949.
Box 1a. Shows a brief description of the item or service for which amounts are being reported. For
regulated futures contracts and forward contracts, “RFC” or other appropriate description may be
shown. For Section 1256 option contracts, “Section 1256 option” or other appropriate description may
be shown. For a corporation that had a reportable change in control or capital structure, this box may
show the class of stock as C (common), P (preferred), or O (other).
Box 1b. This box may be blank if box 5 is checked or if the securities sold were acquired on a variety of
dates. For short sales, the date shown is the date you acquired the security delivered to close the short
sale.
Box 1c. Shows the trade date of the sale or exchange. For short sales, the date shown is the date the
security was delivered to close the short sale. For aggregate reporting in boxes 8 through 11, no entry
will be present.
Box 1d. Shows the cash proceeds, reduced by any commissions or transfer taxes related to the sale,
for transactions involving stocks, debt, commodities, forward contracts, non-Section 1256 option
contracts, or securities futures contracts. May show the proceeds from the disposition of your interest(s)
in a widely held fixed investment trust. May also show the aggregate amount of cash and the fair market
value of any stock or other property received in a reportable change in control or capital structure arising
from the corporate transfer of property to a foreign corporation. Losses on forward contracts or nonSection 1256 option contracts are shown in parentheses. This box does not include proceeds from
regulated futures contracts or Section 1256 option contracts. Report this amount on Form 8949 or on
Schedule D (whichever is applicable) as explained in the Instructions for Schedule D.
Box 1e. Shows the cost or other basis of securities sold. If the securities were acquired through the
exercise of a non-compensatory option granted or acquired on or after January 1, 2014, the basis has
been adjusted to reflect your option premium. If the securities were acquired through the exercise of a
non-compensatory option granted or acquired before January 1, 2014, your broker is permitted, but not
required, to adjust the basis to reflect your option premium. If the securities were acquired through the
exercise of a compensatory option, the basis has not been adjusted to include an y amount related to
the option that was reported to you on a Form W-2. If box 5 is checked, box 1e may be blank. See the
Instructions for Form 8949, Instructions for Schedule D, or Pub. 550 for details.
10
$
12 Check if proceeds from
collectibles
www.irs.gov/form1099b
13 Bartering
$
Department of the Treasury – Internal Revenue Service
Box 1f. Shows the amount of accrued market discount. For details on market discount, see Schedule D
(Form 1040) instructions, Instructions for Form 8949, and Pub. 550. If box 5 is checked, box 1f may be
blank.
Box 1g. Shows the amount of nondeductible loss in a wash sale transaction. For details on wash sales,
see Schedule D (Form 1040) instructions, Instructions for Form 8949, and Pub. 550. If box 5 is checked,
box 1g may be blank.
Box 2. The short-term and long-term boxes pertain to short-term gain or loss and long-term gain or loss.
If the Ordinary box is checked, your security may be subject to special rules. For example, gain on a
contingent payment debt instrument subject to the noncontingent bond method generally is treated as
ordinary interest income rather than as capital gain. Please see the Instructions for Form 8949, Pub.
550, or Pub. 1212 for more details on whether there are any special rules or adjustments that might
apply to your security. If box 5 is checked, box 2 may be blank.
Box 3. If checked, the basis in box 1e has been reported to the IRS and one or more of the check
boxes in box 2 must be checked. If box 3 is checked on Form(s) 1099-B and NO adjustment is required,
see the instructions for your Schedule D as you may be able to report your transaction directly on
Schedule D. If the Ordinary check box in box 2 is checked, an adjustment may be required.
Box 4. Shows backup withholding. Generally, a payer must backup withhold if you did not furnish your
taxpayer identification number to the payer. See Form W-9 for information on backup withholding.
Include this amount on your income tax return as tax withheld.
Box 5. If checked, the securities sold were noncovered securities and boxes 1b, 1e, 1f, 1g, and 2 may
be blank. Generally, a noncovered security means: stock purchased before 2011, stock in most mutual
funds purchased before 2012, stock purchased in or transferred to a dividend reinvestment plan before
2012, debt acquired before 2014, options granted or acquired before 2014, and securities futures
contracts entered into before 2014.
Box 6. If the exercise of a non-compensatory option resulted in a sale of a security, indicates whether
the amount in box 1d was adjusted for premium.
Box 7. If checked, you cannot take a loss on your tax return based on gross proceeds from a reportable
change in control or capital structure reported in box 1d. See the Form 8949 and Schedule D
instructions. The broker should advise you of any losses on a separate statement.
Regulated Futures Contracts, Foreign Currency Contracts, and Section 1256 Option Contracts
(Boxes 8 Through 11):
Box 8. Shows the profit or (loss) realized on regulated futures, foreign currency, or Section 1256 option
contracts closed during 2016.
Box 9. Shows any year-end adjustment to the profit or (loss) shown in box 8 due to open contracts on
December 31, 2015.
Box 10. Shows the unrealized profit or (loss) on open contracts held in your account on December 31,
2016. These are considered closed out as of that date. This will become an adjustment reported as
unrealized profit or (loss) on open contracts-–12/31/2016 in 2017.
Box 11. Boxes 8, 9, and 10 are all used to figure the aggregate profit or (loss) on regulated futures,
foreign currency, or Section 1256 option contracts for the year. Include this amount on your 2016 Form
6781.
Box 12. If checked, proceeds are from a transaction involving collectibles.
Box 13. Shows the cash you received, the fair market value of any property or services you received,
and the fair market value of any trade credits or scrip credited to your account by a barter exchange.
See Pub. 525.
Boxes 14–16. Shows state(s)/local income tax information.
Future developments. For the latest information about any developments related to Form 1099-B and
its instructions, such as legislation enacted after they were published, go to www.irs.gov/form1099b.
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-23
Appendix A
Exhibit A-16
671117
2018
Schedule K-1
(Form 1120S)
Department of the Treasury
Internal Revenue Service
beginning
For calendar year 2018, or tax year
/
/
2018
ending
/
/
Information About the Corporation
Part III Shareholder’s Share of Current Year Income,
Deductions, Credits, and Other Items
1
Ordinary business income (loss)
13
Credits
2
Net rental real estate income (loss)
3
Other net rental income (loss)
4
Interest income
14
Foreign transactions
5a Ordinary dividends
A
Corporation’s employer identification number
B
Corporation’s name, address, city, state, and ZIP code
05-7652473
5b Qualified dividends
B & F Antique Restoration
13 Weathervane Road
Wakefield, RI 02879
C
OMB No. 1545-0123
Amended K-1
7,125.00
Shareholder’s Share of Income, Deductions,
Credits, etc.
See back of form and separate instructions.
Part I
Final K-1
6
Royalties
7
Net short-term capital gain (loss)
8a Net long-term capital gain (loss)
IRS Center where corporation filed return
Andover, MA 05501
Part II
D
8b Collectibles (28%) gain (loss)
Information About the Shareholder
8c Unrecaptured section 1250 gain
Shareholder’s identifying number
371-42-5207
E
9
Shareholder’s name, address, city, state, and ZIP code
Net section 1231 gain (loss)
10
Other income (loss)
15
Alternative minimum tax (AMT) items
11
Section 179 deduction
16
Items affecting shareholder basis
620.00 d
1,500.00
Joyce Schnappauf
27 Northrup Street
Wakefield, RI 02879
F
Shareholder’s percentage of stock
ownership for tax year . . . .
.
.
.
30
%
12
Other deductions
a
For IRS Use Only
310.00
17
Other information
v
7,125.00
x
12,500.00
* See attached statement for additional information.
For Paperwork Reduction Act Notice, see the Instructions for Form 1120S.
www.irs.gov/Form1120S
Cat. No. 11520D
Schedule K-1 (Form 1120S) 2018
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-24
Appendix A
Exhibit A-16
(continued)
Schedule K-1 (Form 1120S) 2018
Page
2
This list identifies the codes used on Schedule K-1 for all shareholders and provides summarized reporting information for shareholders who file Form 1040.
For detailed reporting and filing information, see the separate Shareholder’s Instructions for Schedule K-1 and the instructions for your income tax return.
Ordinary business income (loss). Determine whether the income (loss) is
passive or nonpassive and enter on your return as follows:
Report on
Passive loss
See the Shareholder’s Instructions
Passive income
Schedule E, line 28, column (h)
Nonpassive loss
See the Shareholder’s Instructions
Nonpassive income
Schedule E, line 28, column (k)
2. Net rental real estate income (loss) See the Shareholder’s Instructions
3. Other net rental income (loss)
Net income
Schedule E, line 28, column (h)
Net loss
See the Shareholder’s Instructions
4. Interest income
Form 1040, line 2b
5a. Ordinary dividends
Form 1040, line 3b
5b. Qualified dividends
Form 1040, line 3a
6. Royalties
Schedule E, line 4
7. Net short-term capital gain (loss)
Schedule D, line 5
8a. Net long-term capital gain (loss)
Schedule D, line 12
8b. Collectibles (28%) gain (loss)
28% Rate Gain Worksheet, line 4
(Schedule D instructions)
8c. Unrecaptured section 1250 gain
See the Shareholder’s Instructions
9. Net section 1231 gain (loss)
See the Shareholder’s Instructions
10. Other income (loss)
Code
A Other portfolio income (loss)
See the Shareholder’s Instructions
B Involuntary conversions
See the Shareholder’s Instructions
C Sec. 1256 contracts & straddles
Form 6781, line 1
D Mining exploration costs recapture See Pub. 535
E Section 951A income
F Section 965(a) inclusion
See the Shareholder’s Instructions
G Subpart F income other than
sections 951A and 965 inclusion
H Other income (loss)
11. Section 179 deduction
See the Shareholder’s Instructions
12. Other deductions
A Cash contributions (60%)
B Cash contributions (30%)
C Noncash contributions (50%)
D Noncash contributions (30%)
See the Shareholder’s Instructions
E Capital gain property to a 50%
organization (30%)
F Capital gain property (20%)
G Contributions (100%)
H Investment interest expense
Form 4952, line 1
I Deductions—royalty income
Schedule E, line 19
J Section 59(e)(2) expenditures
See the Shareholder’s Instructions
K Section 965(c) deduction
See the Shareholder’s Instructions
L Deductions—portfolio (other)
Schedule A, line 16
M Preproductive period expenses
See the Shareholder’s Instructions
N Commercial revitalization deduction
from rental real estate activities
See Form 8582 instructions
O Reforestation expense deduction
See the Shareholder’s Instructions
P through R
Reserved for future use
S Other deductions
See the Shareholder’s Instructions
13. Credits
A Low-income housing credit (section
42(j)(5)) from pre-2008 buildings
B Low-income housing credit (other)
from pre-2008 buildings
C Low-income housing credit (section
See the Shareholder’s
42(j)(5)) from post-2007 buildings
Instructions
D Low-income housing credit (other)
from post-2007 buildings
E Qualified rehabilitation expenditures
(rental real estate)
F Other rental real estate credits
G Other rental credits
H Undistributed capital gains credit
Schedule 5 (Form 1040), line 74, box a
I Biofuel producer credit
J Work opportunity credit
K Disabled access credit
See the Shareholder’s
L Empowerment zone employment credit
Instructions
M Credit for increasing research
activities
N Credit for employer social security
and Medicare taxes
1.
14.
}
}
See the Shareholder’s Instructions
O Backup withholding
See the Shareholder’s Instructions
P Other credits
Foreign transactions
A Name of country or U.S.
possession
Form 1116, Part I
B Gross income from all sources
C Gross income sourced at
shareholder level
Foreign gross income sourced at corporate level
D Section 951A category
E Foreign branch category
Form 1116, Part I
F Passive category
G General category
H Other
Deductions allocated and apportioned at shareholder level
I Interest expense
Form 1116, Part I
J Other
Form 1116, Part I
Deductions allocated and apportioned at corporate level to foreign source
income
K Section 951A category
L Foreign branch category
Form 1116, Part I
M Passive category
N General category
O Other
Other information
P Total foreign taxes paid
Form 1116, Part II
Q Total foreign taxes accrued
Form 1116, Part II
R Reduction in taxes available for
credit
Form 1116, line 12
S Foreign trading gross receipts
Form 8873
T Extraterritorial income exclusion
Form 8873
U Section 965 information
See the Shareholder’s Instructions
V Other foreign transactions
See the Shareholder’s Instructions
Alternative minimum tax (AMT) items
A Post-1986 depreciation adjustment
B Adjusted gain or loss
See the Shareholder’s Instructions
C Depletion (other than oil & gas)
and the Instructions for Form 6251
D Oil, gas, & geothermal—gross income
E Oil, gas, & geothermal—deductions
F Other AMT items
Items affecting shareholder basis
Form 1040, line 2a
A Tax-exempt interest income
B Other tax-exempt income
C Nondeductible expenses
See the Shareholder’s Instructions
D Distributions
E Repayment of loans from
shareholders
Other information
A Investment income
Form 4952, line 4a
B Investment expenses
Form 4952, line 5
C Qualified rehabilitation expenditures
(other than rental real estate)
See the Shareholder’s Instructions
D Basis of energy property
See the Shareholder’s Instructions
E Recapture of low-income housing
credit (section 42(j)(5))
Form 8611, line 8
F Recapture of low-income housing
credit (other)
Form 8611, line 8
G Recapture of investment credit
See Form 4255
H Recapture of other credits
See the Shareholder’s Instructions
I Look-back interest—completed
long-term contracts
See Form 8697
J Look-back interest—income
forecast method
See Form 8866
K Dispositions of property with
section 179 deductions
L Recapture of section 179 deduction
M through U
V Section 199A income
W Section 199A W-2 wages
See the Shareholder’s Instructions
X Section 199A unadjusted basis
Y Section 199A REIT dividends
Z Section 199A PTP income
AA Excess taxable income
AB Excess business interest income
AC Other information
}
}
}
}
}
Report on
Code
15.
16.
17.
}
}
}
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
A-2
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