Tax Return-Individual TNumber Two hree (after Chapter 7)
Please complete the required federal individual income tax return forms for the following
taxpayer. Unless instructed otherwise, the information provided is for the taxpayer’s 2012 tax
year. Please complete his 2012 tax return. Ignore the requirement to attach the form(s) W-2 to
the front page of the Form 1040. If required information is missing, use reasonable assumptions
to fill in the gaps.
Bob and Melissa Grant are married and live in Lexington, Kentucky. The Grants have two
children Jared age 15 and Alese age 12. The Grants would like to file a joint tax return for the
The following information relates to the Grant’s tax year:
Bob’s Social Security number is 987-45-1234
Melissa’s Social Security number is 494-37-4893
Jared’s Social Security number is 412-32-5690
Alese’s Social Security number is 412-32-6940
The Grants’ mailing address is 95 Hickory Road, Lexington, Kentucky 40502.
Jared and Alese are tax dependents for federal tax purposes
Bob Grant received the following during the year:
Federal Income Tax
State Income Tax
Melissa Grant received the following during the year:
Federal Income Tax
State Income Tax
All applicable and appropriate payroll taxes were withheld by Grants’ respective employers.
The Grants also received the following during the year:
Interest Income from First Kentucky Bank
Interest Income from City of Lexington, KY Bond
Interest Income from U.S. Treasury Bond
Interest Income from Nevada State School Board Bond
Workers’ Compensation payments to Bob
Disability payments received by Bob on account of injury
• National Storage paid 100% of premiums the premiums on the policy and
included the premium payments in Bob’s taxable wages
Receipt of payment by Melissa as a result of a lawsuit for damages sustained in a car
• Medical Expenses
• Emotional Distress
• Punitive Damages
Eight years ago, Melissa purchased an annuity contract for $88,000. This year, she received her
first payment on the annuity. The payment amount was $15,000. The annuity started to pay on
January 1 and she received a full first year’s payment. It will pay her $15,000 per year for ten
years (beginning with this year). The $15,000 payment was reported to Melissa a form 1099-R
for the current year (box 7 contained an entry of “7” on the form).
The Grants did not own, control or manage any foreign bank accounts nor were they a grantor or
beneficiary of a foreign trust during the tax year.
The Grants paid or incurred the following expenses during the year:
Dentist/Orthodontist (unreimbursed by insurance)
Doctors (unreimbursed by insurance)
Prescriptions (unreimbursed by insurance)
KY state tax payment made on 4/15/13 for 2012 liability
Real property taxes on residence
Vehicle property tax based upon age of vehicle
Mortgage interest on principal residence
Interest paid on borrowed money to purchase the City of
Lexington, KY municipal bonds
Interest paid on borrowed money to purchase
U.S. Treasury bonds
Contribution to the Red Cross
Contribution to Senator Rick Hartley’s Re-election Campaign
Contribution to First Baptist Church of Kentucky
Fee paid to Jones & Company, CPAs for tax preparation
In addition, Bob drove 6,750 miles commuting to work and Melissa drove 8,230 miles
commuting to work. Both the Grants have represented to you that they maintained careful logs
to support their respective mileage.
The Grants drove 465 miles in total to receive medical treatment at a hospital in April.
During the year, the Grants’ personal residence was burglarized on October 1 of the current year.
The theft occurred during the day while both the Grants were at work and their children were at
school. The Grants had the following personal property stolen:
Fair Value on
Date of Theft
Tax Basis of
2005 Honda Pilot
The Grants want to contribute to the Presidential Election Campaign. The Grants would like to
receive a refund (if any) of any tax they may have overpaid for the year. Their preferred method
of receiving the refund is by check.