Use the following information to complete Keith and Jen Hamilton’s 2018 federal income tax return. Form 1040, supporting schedules, and instructions to the forms and schedules can be found at www.irs.gov. You do not need to attach copies of the information forms (i.e. W-2s, 1099s, etc.) to the return and disregard due diligence checklists. The facts are as following:
1. Keith is employed as an airline pilot for Flyby Airlines In Las Vegas, NV. Jen is employed as a kindergarten teacher at Small World Elementary School, in Henderson, NV. Keith and Jen live in a home they purchased thisyear. Keith and Jen have three children who lived with them all year, Sid,Robert and Tiffany. Keith and Jen had health coverage for the family for the full year and did not have any foreign bank accounts or trusts. Keith and Jen provided the following personal information:
a. Keith and Jen wish to contribute to the presidential election campaign. Keith and Jen do not claim itemized deductions.
b. Keith and Jen live at 1234 Easy Street, Las Vegas, NV 89101.
c. Keith’s birthday is 2/12/1947 and his Social Security number is 432-45-6789.
d. Jen’s birthday is 12/31/1967 and her Social Security number is 867-53-0911.
e. Robert’s birthday is 5/13/2010 and his Social Security number is 452-43-3232.
f. Tiffany’s birthday is 1/8/2011 and her Social Security number is 452-24-1980.
g. Sid’s birthday 2/2/2012 and his Social Security number is 452-51-4589.
2. Keith and Jen have included the tax documents they received during the year with this package. Keith and Jen have also provided you with the following information:
a. On January 21, 2018 Jen was involved in a car accident. Because the other driver was at fault, the other driver’s insurance company reimbursed Jen $1,350 formedical expenses that she paid out of pocket and paid her $1,000 foremotionaldistress originating from the physical injury from the accident. The other driver was ordered to pay Jen $700 restitution as punitive damages. She received payment on March 15, 2018.
b. Keith is a partner in a partnership that sells airplane parts. The Schedule K-1 is attached. He materially participates in the business. His total investment is at risk, he did not have any changes in his stock ownership, and he does not have any loans to the S corporation.
c. On July 27, 2018, Jen purchased supplies for her classroom totaling $249.79. Small World Elementary does not reimburse teachers for their out of pocket costs.
d. Jen’s grandmother died during 2017.Jen received her inheritance of $30,000 on May 12, 2018.
e. On July 25, 2018, Keith’s aunt Beatrice gave Keith $18,000 because she wanted to let everyone know that Keith is her favorite nephew. Keith gave a gift to his favorite niece, Carolyn, of cash in the amount of $10,000. Carolyn’s social security number is 550-85-9654. She resides at 963 Mesa Street, Las Vegas, NV 89101. Her age is 18. Keith has not made any prior gifts.
f. On January 5, 2018, Keith and Jen sold their home in Las Vegas, NV, for $510,000 (net of commissions). Keith and Jen purchased the home eleven years ago for $470,000. On January 29, 2018, they bought a new home for $675,000.
g. Keith won a jackpot at the Mirage Casino during the year, in the amount of $15,000. He incurred $7,500 in gambling losses, paid during 2018, before winning the jackpot.
h. Keith and Jen made four timely quarterly estimated payments of $1,500. Their prior year tax was
$16,750 and no payments were applied from 2017. They would like their overpayment, if any,
