Following is a list of information for Peter and Amy Jones for the current tax year. Peter
and Amy are married and have three children, Aubrynne, Bryson, and Caden. They live at
100 Main Street, Anytown, USA 00000. Peter is a lawyer working for a Native American law firm. Amy works part-time in a genetic research lab. The Jones’ Social Security
numbers and ages are as follows:
Name S.S. No. Age
Peter 111-11-1111 32
Amy 222-22-2222 28
Aubrynne 333-33-3333 5
Bryson 444-44-4444 3
Caden 555-55-5555 1
Receipts
Peter’s salary $70,000
Amy’s salary 32,000
Interest income on municipal bonds 2,400
Interest income on certificate of deposit (Universal Savings) 3,100
Dividends on GM stock 1,600
Disbursements
Eyeglasses and exam for Aubrynne $ 600
Orthodontic work for Bryson to correct a congenital defect 2,500
Medical insurance premiums, after-tax basis 1,800
Withholding for state income taxes 7,200
Withholding for federal income taxes 16,000
State income taxes paid with last year’s tax return 500
(paid when the return was filed in the current year)
Property taxes on home 1,100
Property taxes on automobile 300
Interest on home 9,700
Interest on credit cards 200
Cash contribution to church 5,900
In addition to the above, on September 17, Peter and Amy donate some Beta Trader, Inc.
stock to Lakeville Community College. Beta Trader, Inc. is publicly traded. The FMV of
the stock on the date of the contribution is $700. Peter and Amy had purchased the stock
on November 7, 2008 for $300.
Compute Peter and Amy’s income tax liability for 2020 using Form 1040, Schedules
A and B, and Form 8283, if necessary. Assume the couple had no transactions involving
virtual currency.
