FOUR WORKBOOK PROBLEMS TO BE COMPLETED BY RETURN PREPARERS

1.      Do workbook problems Graham and Kent as describe in pub 4491W

2.      Do workbook problems Webster and Austin as describe in pub 4491W and the following additional information obtained during your interview:

3.      FOR WEBSTER:

a.      Courtney left her teaching position in July 2013.  In Oct, she was one of a dozen former teachers ask to quality review the state proficiency exams for 8^th graders.  She received a 1099Misc with $1200 in box 7 (nonemployee compensation).  A friend told her this money was not taxable.  She had mileage of 50 and parking fees of $50.  She further states that WA state law allows that a former teacher can only perform this function one time.  She took the job as a matter of civic duty as she didn’t need the money which she donated to her former school.

b.      The Websters own an adjacent lot to their home and rent the land to a casino which erected a sign.  They received a 1099Misc for $5000.

4.      FOR AUSTIN:

a.      Hoping to help one of this daughters with college expenses, he sold stock in XYZ company that he had acquired in 2007.   However, she received a full scholarship and help from her employer.  Since this stock was one of his favorites, he bought it back and didn’t think this belonged on his tax return and he later sold all of his shares anyway.  After carefully questioning, you determined the following:

2000 sh bought on 02/07/2007 for $20,000

XYZ stock split 2:1 on 01/08/2010

3000 sh sold on 06/30/2013 for $12,000

2000 sh bought on 07/25/2013 for $12,000

3000 sh sold on 08/15/2013 for $30,000