ACCT 3221 Income Taxation 1 ACCT 3221 Assignment Project Tax Project Based on the information provided below, complete a 2025y Form 1040 and any supporting schedules/forms for Bob and Melissa Grant.
ACCT 3221 Income Taxation 1 ACCT 3221 Assignment Project Tax Project Based on the information provided below, complete a 2025y Form 1040 and any supporting schedules/forms for Bob and Melissa Grant. You should complete this tax return manually using the forms available from the IRS website, www.irs.gov. You may not use software to assist in preparing the forms. You may find the form instructions helpful in completing this assignment. Do not calculate AMT nor a State Return. The 1040 and all supporting documents must be typed, neat, and professional, and submitted as a single PDF file. One hundred points are assigned to this project.
Due Date Project is due no later than Sunday, February 22nd 2026 at 11:59 pm.
Instructions You are to work on this assignment individually.
Working on this assignment or discussing it with others is not permitted.
Please include your name in the paid preparerâs box of the 1040.
Taxpayer Information Bob (age 43) and Melissa (age 41) Grant are married and live in Lexington, Kentucky. The Grants have three children:
Robert (age 21, college student)
Jared (age 10)
Judy (age 9)
The Grants would like to file a joint tax return for the year.
Social Security Numbers Bobâs Social Security number is 987-45-1234
Melissaâs Social Security number is 494-37-4883
Robertâs Social Security number is 412-32-4690
Jaredâs Social Security number is 412-32-5690
Judyâs Social Security number is 412-32-7690
Address The Grantsâ mailing address is: 95 Hickory Road, Lexington, Kentucky 40502
Dependents Robert, Jared, and Judy are tax dependents for federal tax purposes.
Bob Grant â Wage Income Employer Gross Wages Federal Income Tax Withholding State Income Tax Withholding National Storage $70,000 $15,000 $5,000 Lexington Little League $15,000 $3,000 $2,000 Melissa Grant â Wage Income Employer Gross Wages Federal Income Tax Withholding State Income Tax Withholding Jensen Photography $40,000 $8.000 $2,000 All applicable and appropriate payroll taxes were withheld by Grantsâ respective employers.
Melissaâs Photography Business (2023) Income: Weddings and Receptions: $40,000 in fees
Photo Restorations: $5,000 in fees
Family Portraits: $5,000 in fees
Expenses: Photography Supplies: $10,000
Mileage: 1,000 miles
Office Supplies: $2,000
Props and Backgrounds: $2,000
Advertising: $1,000
Camera and Lenses: $5,000
Education Expenses The Grants paid $10,000 to the University of Kentucky for Robertâs tuition and fees in 2023.
Stock Sale Information The Grants sold 1,000 shares of ExxonMobil stock on July 1, 2023.
Purchase Date: January 1, 2010
Purchase Price: $20 per share
Selling Price: $70 per share
Commissions and Fees: $20 per share
Other Income Received Interest Income from First Kentucky Bank $6,000
Interest Income from City of Lexington, KY Bonds $3,000
Interest Income from U.S. Treasury Bonds $7,000
Interest Income from Nevada State School Board Bonds $3,000
Workersâ Compensation payments to Bob $10,000
Disability Payments Disability payments received by Bob on account of injury $20,000
National Storage paid 100% of premiums the premiums on the policy and included the premium payments in Bobâs taxable wages
Lawsuit Settlement (Melissa) Melissa received the following funds as a result of a lawsuit for damages sustained in a car accident:
Medical Expenses $30,000
Emotional Distress $40,000
Punitive Damages $100,000
Raffle Prize December 12, 2023 was the Grantâs lucky day! They won a raffle prize of a new 2024 Ford Mustang convertible valued at $80,000. They paid 10% in Federal income taxes and 5% in state income taxes of the value of the car.
Inheritance Bob received an inheritance from his favorite uncle, James Robert, in the amount of $300,000 in cash, on November 30, 2023.
Rental Income The Grantâs rent a garage apartment to Robertâs best friend, Ricky, for $3,000 a month.
Total expenses for the year were $10,000, which consisted of utilities only.
Depreciation for the year on the apartment is $5,000.
Alimony Bob paid his ex-wife $15,000 in alimony in 2023. They divorced in 2015.
Annuity Income Five years ago, Melissa purchased an annuity contract for $70,000. This year, she received her first payment on the annuity.
Payment amount was $10,000
The annuity started to pay on January 1
She received a full first yearâs payment
It will pay her $10,000 per year for ten years (beginning with this year)
The $10,000 payment was reported to Melissa on form 1099-R for the current year
Foreign Accounts 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.
Expenses Paid During The Year Dentist/Orthodontist (unreimbursed by insurance) $5.000
Doctors (unreimbursed by insurance) $2,000
Prescriptions (unreimbursed by insurance) $1,000
KY state tax payment made on 4/15/23 for 2022 tax liability $4,000
Real property taxes on residence $8,000
Vehicle property tax based upon age of vehicle $1,000
Mortgage interest on principal residence $30,000
Interest paid on borrowed money to purchase the City of Lexington, KY municipal bonds $2,000
Interest paid on borrowed money to purchase U.S. Treasury bonds $5,000
Contribution to the Red Cross $7,000
Contribution to Senator Rick Taylorâs Re-election Campaign $2,000
Contribution to First Church of Kentucky $12,000
Fees paid to Jones & Company, CPAs for tax preparation $500
Mileage Information Bob drove 12,000 miles commuting to work
Melissa drove 8,000 miles commuting to work
Both the Grants have represented to you that they maintained careful logs to support their respective mileage
The Grants drove 1,000 miles in total to receive medical treatment at hospitals and doctor offices in 2023
Additional Information 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
