Nancy Yamasaki is a Chief Financial Officer for GoMax Corp. She is single (no children), age 45, and lives at 826 Vista Drive Street in San Carlos, CA 94025. Her

social security number is 555-86-1212. Her W-2 for 2019 reads as follows:

Earnings from GoMax Corp.: $188,000

2019 Federal Income tax withheld: $40,000

2019 State Income tax withheld: $18,000

Nancy’s other income is as follows: interest of $3,000 from a CD at Bank of America and interest of $3,750 from corporate bonds issued by PG & E. She also earned

$32,000 of tax-exempt private activity bond interest, which is included in Form 6251, line 2g Part I. (Keep in mind this may not be the only item you need to include

in Form 6251).

Nancy also has the following payments and written proof of each of them:

Home mortgage interest (acquisition mortgage) $42,210 (debt amount is under $1 million)
Credit card interest $2,950
California auto registration value based property tax ( i.e. the deductible part) on her 2012 sports cars $770
Auto Insurance Premium $1,770
State Income taxes paid in April 2019 (for the 2018 California tax return) $17,150
Federal income taxes paid in April 2019 (for the 2018 Federal return) $2,990
Property taxes on her home $11,260
Medical expenses (i.e. prescriptions, doctor co-pays, legitimate stuff) $1,025
CPA tax preparer fees to handle 2012 IRS audit (no extra tax was due) $9,100
Charitable contributions:

American Cancer Society $2,000
University of California, Berkley $12,000
Esperanza Orphanage ( a charity incorporated in Chile) $500
Required: Complete Nancy’s federal tax return for 2019. You will prepare and turn in Form 1040,Sch 2, Sch. A, Sch B and Form 6251.

Sample Solution