Arnold Arnoldson SS # 123-45-6789 lives at 1230 Cockle Street, Reno, NV 89557. Arnold lives with his 6 year-old son Benny, SS# 234-56-7890. Benny spends ten months each year with Arnold and two months each year with Susan Arnoldson, SS# 890-23-4513, his mother, and Arnoldâ€™s ex-wife. Arnold is a CPA and has a job with the State of Nevada Tax Department and earned $67,000 in wages for 2012. $9,000 of federal tax was withheld from his pay. Arnoldâ€™s mom, Leona Arnoldson SS# 345-67-8901, and his former mother-in-law, Shari Jones SS# 567-89-0122, share an apartment in Reno that Arnold pays for. He provides more than 50% of the support for the two elderly women. Arnold also pays more than 50% of the support for Leonaâ€™s father Ephraim Luce, SS# 876-54-3210, who lives in a nursing home. Ephraim was a very successful artist and still earns $4,000 per year for his intricate painted wooden carvings of big-horn sheep.
Arnold also runs his own tax preparation business at 12 Main St., Virginia City NV 89406, as a single member LLC. His cash receipts from the business totaled $33,000 for 2012. He also is owed $1,700 from a client that refused to pay for his services. His expenses were as follows: rent $7,000, utilities $3,750, part-time help $6,200, entertainment of clients at his country club $2,500, travel to conferences $570, insurance $1,100, and office supplies of $540. He also purchased tax software for $350 and a new computer for $1,800 during 2012. He paid $6,000 in estimated 2012 federal income taxes during the year. Arnold also took a graduate course at UNR in taxation during the fall 2012 semester and paid $300 in tuition and $120 for the course textbook. One of Arnoldâ€™s clients was being audited by the IRS. Arnold paid the IRS agent $1,000 in cash to â€œtake care ofâ€ the problem. Since the office needed painting and a painter Arnold knows needed his taxes done, Arnold bought the paint for $200 and then traded his tax prep services for the painterâ€™s services. The fair value of the services exchanged was $750. Arnold sold some business office furniture he acquired in 2007 for $5,000 for $1,500 on 11/10/12. He used MACRS half-year convention to depreciate the furniture.
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Arnold likes to trade stock and bonds and had the following trades during 2012. He sold 300 shares of GE for $31.59 per share on 10/17/12. He had purchased the GE as part of a 600 share lot on 6/10/01 for $39.40 per share. He purchased 1,000 shares of Disney on 12/15/12 for $19.10 per share. He also sold on 12/2/12 two acres of land in Reno for $136,000, acquired from his Dad when his father died on 5/15/11. His Dad had paid $32,000 for the land on 4/10/79. The land was appraised for $106,000 in May of 2011. Arnold also received a gift from his Aunt Alice on 3/16/11 of an antique gold watch that was purchased in 1949 for $200. The watch fetched $700 on 1/1/12 when he sold it to a pawn shop in town.
Arnold earned the following in investment income for 2012: Interest from Wells Fargo Bank $1,972, interest on State of Nevada Bonds $3,500, interest from a NV Energy corporate bond of $2,500, qualified dividends from GE of $1,306, a long-term capital gains distribution of $1,550 from Fidelity Natural Resource Fund, money market fund dividends of $4,132, and $30 of interest from a loan to Bill Allen, a personal friend.
Arnold owns his home on Cockle Street and it is his primary residence. He paid mortgage interest of $11,535 during the year. He paid $4,700 of real estate taxes, $1,000 of sales taxes, and $525 of personal property taxes during the year. He had $14,500 of medical expenses as follows: Arnold $2,700, Benny $1,250, Leona $5,000 and Shari $5,550. He made charitable contributions of $1,500 to UNR and $350 to the American Red Cross.
The final divorce decree between Arnold and Susan requires Arnold to pay alimony of $600 per month until the earlier of June 2015 or When Susan dies or remarries. He is also obligated to pay Susan $400 child support for each month that Benny is staying with Susan each year.
On August 12, 2012 there was a windstorm in Reno that blew down a big tree onto the roof of Arnoldâ€™s Cockle Street house. The roof of the house was damaged and cost $6,750 to repair. The removal of the tree was $400 and the planting of another tree was $710. The new tree was nothing near as big as the tree that was lost. In fact, the landscaper told Arnold it would cost $2,500 to replace the tree that was destroyed by the storm. Arnold collected $4,300 from the insurance company for his loss.
Arnold also owns a rental property at 555 9th Street in Reno that he rents to a student. He received $7,000 in rent during 2012 and had the following expenses: Insurance $1,300, maintenance $850, real estate taxes $2,300, mortgage interest $3,200 and depreciation of $500.