AC 371 Tax Return Project
Fall 2022
Student Handout 2: Current Year PBC Manual Documents
Kourtney Smith
4646 19th St.
Lubbock, TX 79400
March 21, 2023
Dear CPA,
I can’t believe that it’s tax time again! Hopefully I have sent everything you need. Things have been a little hectic
around our house with the new baby and everything.
I’m still teaching for Lubbock ISD. I did some tutoring this summer so you will see the new W-2. The extra
income helps!
I’ve attached the income statement for Scott’s landscaping business. Smith Landscaping is still doing well, but we
had a minor setback with the EPA in July over some pollution issues. Scott used the wrong kind of fertilizer when
trying to clean up the front yard of a house his client was trying to sell, and it contaminated the water table. The
EPA fined Smith Landscaping $6,400, all for a little bit of curb appeal! Scott recorded the fine as a legal expense on
his books, but I hope we can at least get some of it back on our taxes.
Scott was in a car accident in late October. He was hit by a drunk driver on his way home from work. Luckily he
wasn’t hurt too bad but it totaled his car, which was sad because we spent $49,000 on that thing just three years ago.
The judge ordered the drunk driver to pay us $8,500 for medical expenses related to Scott’s minor injuries and
another $8,500 for the emotional trauma he suffered. Scott still doesn’t like getting in the car. The judge also
awarded us $12,000 in punitive damages. It was the guy’s second DWI in 3 months.
We finally sold the rental house. YAY! I thought it would never sell. Sam Johnston, who had already been renting
from us, was the buyer.
In January, Scott’s father passed away. He had a life insurance policy issued by Liberty Mutual with a maturity
value of $400,000. Scott was the designated beneficiary of the policy and picked a settlement option of $82,500
annually, payable over five years. We received a check for $82,500 in December.
In August, I fell off a desk in my classroom trying to hang decorations. I wasn’t able to work for 12 weeks so I went
on short-term disability. I received a total of $7,200 in disability benefits.
In June, Scott and I went to the Bahamas. It was amazing! We stayed at a fabulous all-inclusive resort that had 7
swimming pools and 10 different restaurants. We went snorkeling, took a sunset cruise and even swam with the
dolphins. And the best part was it was free! Scott won the trip for being the 12th caller to a local radio show. I’ll
have to show you pictures next time I see you.
In March (3/18/2022), my grandmother gave me 1,000 shares of LMN Inc. stock for my birthday. I sold the stock
later in the year because we had to buy a new car and wanted the cash to make a down payment. My grandmother
told me that she purchased the stock in 2003 (7/1/2003) for $1 per share, which is crazy because it was worth $8.10
per share when I received it in March. My dad also gave me another $3,000 in cash to help with the new car.
I hope everything is going well for you and your family. We need to get together for lunch soon. Please let me
know if you have any questions or need any more information.
All the best,
Kourtney Smith
PBC Business - Student Copy
Smith Landscaping
Income Statement
For the Year Ended December 31, 2022
Revenue
142,500.00
Advertising
Insurance - professional
Insurance - Health (Scott)
Legal fees
Office chair
Office expense
Repairs and Maintenance
Payroll tax
Meals with Clients
Cell phone
Wages - landscape assistant
Draw
Supplies
Professional journals
New computers (2) & printer
License renewal
Conference in Denver
Registration
Hotel
Airfare
Meals
Total Expense
5,200.00
6,500.00
6,320.00
8,900.00
590.00
1,340.00
2,600.00
3,101.00
980.00
3,760.00
44,300.00
58,000.00
31,950.00
365.00
2,980.00
720.00
650.00
1,455.00
535.00
490.00
180,736.00
Net Income
(38,236.00)
PBC Personal Exp - Student Copy
Scott & Kourtney Smith
2022 Expenses
Personal Expenses
Mortgage interest - Primary Residence
Real estate tax
Insurance
Repairs & maintenance
Utilities
Doctor
Hospital
Dentist
Prescription drugs
Over the counter drugs
Cosmetic surgery
Scott's dad's funeral cost
Donations:
United Way
St. Matthew's Church
Texas Tech University
CPA fee
Investment expense
Daycare
School supplies
Goodwill
$
$
$
$
$
$
$
$
$
$
$
$
9,540.00
6,780.00
4,600.00
3,200.00
8,670.00
5,120.00
4,540.00
350.00
275.00
210.00
16,500.00
9,400.00
$
$
$
$
$
$
$
???
1,450.00
6,200.00
2,000.00
2,600.00
145.00
8,300.00
375.00 Supplies purchased for Kourtney's classroom
Donated 10 bags of clothes
Expenses for Rental Property
Cleaning
Fee to property management co.
Mortgage interest
Property Insurance
Property taxes
Repairs
$
$
$
$
$
$
630.00
850.00
1,020.00
485.00
655.00
1,700.00
Expense for Oil & Gas Property
Property tax
$
1,540.00
PBC 1099-B 1 Student Copy
1a Date of sale or exchange
PAYER's name, street address, city , state, ZIP code, and telephone no.
12/15/2022
1b Date of acquisition
2/18/2022
XYZ Company
123 ABC Drive
Indianapolis, IN 46254
1c Type of gain or loss
Short-term
Long-term
(317) 407-2393
PAYER's federal identification number
RECIPIENT'S identification number
111-22-3333
RECIPIENT'S name
Scott Smith
Street address (including apt. no)
x
2a Stocks, bonds, etc.
A
$
B
$
3 Cost or other basis
5 Wash sale loss disallowed
6,580.00
3,565.00
7 Bartering
4646 19th St.
City, state, and ZIP code
2022
Form 1099-B
1d Stock or other symbol
Reported
to IRS
x
Proceeds From Broker and
Barter Exchange Transactions
Gross proceeds
Gross proceeds less
commissions and option
premiums
1e Quantity sold
2b
Check if loss not allowed based
on amount in box 2a
Copy A
6 Check if:
a
b
Noncovered security
Basis reported to IRS
8 Description
Lubbock, TX 79401
Account number (see instructions)
CUSIP number
2nd TIN not. 9 Profit or (loss) realized in 2022 on
closed contracts
11 Unrealized profit or (loss) on open
contracts - 12/31/2022
Form 1099-B
For Instructional Purposes only - Not an official tax form
A 6580 Sch D Line 8d, D-1
B (3565) Sch D Line 8e, D-1
3015 Sch D Line 8h, D-1
10 Unrealized profit or (loss) on open
contracts - 12/31/2021
12 Aggregate profit or (loss) on contracts
PBC
500
4 Federal income tax withheld
13 State
14 State identification no.
15 State tax withheld
D1.1
PBC 1099-B 2 Student Copy
1a Date of sale or exchange
PAYER's name, street address, city , state, ZIP code, and telephone no.
11/2/2022
1b Date of acquisition
LMN Inc.
2505 Mavis Ct.
Louisville, KY 40216
1c Type of gain or loss
Short-term
Long-term
(502) 888-2939
PAYER's federal identification number
RECIPIENT'S identification number
222-33-4444
RECIPIENT'S name
Kourtney Smith
Street address (including apt. no)
Form 1099-B
1d Stock or other symbol
2a Stocks, bonds, etc.
$
8,100.00
Reported
to IRS
Gross proceeds
4 Federal income tax withheld
5 Wash sale loss disallowed
6 Check if:
7 Bartering
a
b
Proceeds From Broker and
Barter Exchange Transactions
Gross proceeds less
commissions and option
premiums
3 Cost or other basis
4646 19th St.
City, state, and ZIP code
2022
1e Quantity sold
2b
1000
Check if loss not allowed based
on amount in box 2a
Copy A
Noncovered security
Basis reported to IRS
8 Description
Lubbock, TX 79401
Account number (see instructions)
CUSIP number
Form 1099-B
For Instructional Purposes only - Not an official tax form
2nd TIN not. 9 Profit or (loss) realized in 2022 on
closed contracts
11 Unrealized profit or (loss) on open
contracts - 12/31/2022
10 Unrealized profit or (loss) on open
contracts - 12/31/2021
12 Aggregate profit or (loss) on contracts
13 State
14 State identification no.
15 State tax withheld
D1.2
PBC
PBC 1099-DIV 1 Student Copy
PAYER's name, street address, city or town, province or state, country, ZIP or foreign
postal code, and telephone no.
Acme Clothing Company
355 Looney Ave.
Hershey, PA 17033
USA
(717) 123-4589
PAYER's federal identification number
1a Total ordinary dividends
A
$
347.00
1b Qualified dividends
$
RECIPIENT'S identification number
347.00
2022
2a Total capital gain distr.
Form 1099-DIV
2b Unrecap. Sec. 1250 gain
2c Section 1202 gain
2d Collectibles (28%) gain
3 Nondividend distributions
4 Federal income tax withheld
Dividends and Distributions
Copy A
111-22-3333
RECIPIENT'S name
Scott Smith
5 Investment Expenses
Street address (including apt. no)
4646 19th St.
City or town, province or state, country, and ZIP or foreign postal code
Lubbock, TX 79401
Account number (see instructions)
6 Foreign tax paid
7 Foreign country or U.S. possession
8 Cash liquidation distributions
9 Noncash liquidation distributions
10 Exempt-interest dividends
11 Specified private activity bond interest
dividends
2nd TIN not. 12 State
13 State identification no.
14 State tax withheld
Form 1099-DIV
For Instructional Purposes only - Not an official tax form
A
B2.2
B2.3
Ordinary Dividends
Qualified Dividends
347
139
241
727 1040 Line 3a, Sch B Line 6, 1040-1
727 1040 Line 3b, 1040-1
B2.1
PBC
PBC 1099-DIV 2 Student Copy
PAYER's name, street address, city or town, province or state, country, ZIP or foreign
postal code, and telephone no.
Maple Incorporated
258 Maple Avenue
Montpelier, VT 05602
USA
(802) 999-8389
PAYER's federal identification number
1a Total ordinary dividends
B2.1
$
139.00
1b Qualified dividends
$
RECIPIENT'S identification number
139.00
2022
2a Total capital gain distr.
Form 1099-DIV
2b Unrecap. Sec. 1250 gain
2c Section 1202 gain
2d Collectibles (28%) gain
3 Nondividend distributions
4 Federal income tax withheld
Dividends and Distributions
222-33-4444
RECIPIENT'S name
Kourtney Smith
Street address (including apt. no)
4646 19th St.
City or town, province or state, country, and ZIP or foreign postal code
Lubbock, TX 79401
Account number (see instructions)
Form 1099-DIV
For Instructional Purposes only - Not an official tax form
5 Investment Expenses
6 Foreign tax paid
7 Foreign country or U.S. possession
8 Cash liquidation distributions
9 Noncash liquidation distributions
10 Exempt-interest dividends
11 Specified private activity bond interest
dividends
2nd TIN not. 12 State 13 State identification no.
14 State tax withheld
Copy A
B2.2
PBC
PBC 1099-DIV 3 Student Copy
PAYER's name, street address, city or town, province or state, country, ZIP or foreign
postal code, and telephone no.
Brinker Corporation
6890 Mesa Street
Laredo, TX 78040
USA
(956) 890-2356
PAYER's federal identification number
1a Total ordinary dividends
B2.2
$
241.00
1b Qualified dividends
$
RECIPIENT'S identification number
241.00
2022
2a Total capital gain distr.
Form 1099-DIV
2b Unrecap. Sec. 1250 gain
2c Section 1202 gain
2d Collectibles (28%) gain
3 Nondividend distributions
4 Federal income tax withheld
Dividends and Distributions
111-22-3333
RECIPIENT'S name
Scott Smith
Street address (including apt. no)
4646 19th St.
City or town, province or state, country, and ZIP or foreign postal code
Lubbock, TX 79401
Account number (see instructions)
Form 1099-DIV
For Instructional Purposes only - Not an official tax form
5 Investment Expenses
6 Foreign tax paid
7 Foreign country or U.S. possession
8 Cash liquidation distributions
9 Noncash liquidation distributions
10 Exempt-interest dividends
11 Specified private activity bond interest
dividends
2nd TIN not. 12 State 13 State identification no.
14 State tax withheld
Copy A
B2.3
PBC
PBC 1099-INT 1 Student Copy
PAYER's name, street address, city or town, province or state, country, ZIP or foreign postal Payer's RTN (optional)
code, and telephone no.
First State Bank of Lubbock
2432 Quaker Ave.
Lubbock, TX 79409
USA
(806) 888-2222
PAYER's federal identification number
2022
1 Interest Income
A
$
275.00
2 Early Withdrawal Penalty
Form
Interest Income
1099-INT
Copy A
B1.1
PBC
RECIPIENT'S identification number
232343
111-22-3333
RECIPIENT'S name
3 Interest on U.S. Savings Bonds and Treas. Obligations
B
$
74.00
4 Federal income tax withheld
5 Investment expenses
6 Foreign tax paid
7 Foreign country or U.S. possession
8 Tax-exempt interest
9 Specified private activity bond interest
Scott Smith
Street address (including apt. no)
4646 19th St.
City or town, province or state, country, and ZIP or foreign postal code
Lubbock, TX 79401
2nd TIN not. 10 Tax-exempt bond CUSIP no.
Account number (see instructions)
11 State 12 State identification no.
13 State tax withheld
Form 1099-INT
For Instructional Purposes only - Not an official tax form
A
B
B1.2
K1.1
Taxable Interest
275
74
400
4320
5,069
Sch B Line 1
Sch B Line 1
Sch B Line 1
Sch B Line 1
1040 Line 2b, Sch b Line 2, 1040-1
PBC 1099-INT 2 Student Copy
PAYER's name, street address, city or town, province or state, country, ZIP or foreign
postal code, and telephone no.
State Bank of Texas
4890 Cowboy Way
Dallas, TX 75001
USA
(800) 123-4567
PAYER's federal identification number
Payer's RTN (optional)
2022
1 Interest Income
B1.1
$
2 Early Withdrawal Penalty
400.00
Form
Interest Income
1099-INT
Copy A
RECIPIENT'S identification number
222-33-4444
RECIPIENT'S name
3 Interest on U.S. Savings Bonds and Treas. Obligations
4 Federal income tax withheld
5 Investment expenses
6 Foreign tax paid
7 Foreign country or U.S. possession
8 Tax-exempt interest
9 Specified private activity bond interest
Kourtney Smith
Street address (including apt. no)
4646 19th St.
City or town, province or state, country, and ZIP or foreign postal code
Lubbock, TX 79401
Account number (see instructions)
Form 1099-INT
For Instructional Purposes only - Not an official tax form
2nd TIN not. 10 Tax-exempt bond CUSIP no.
11 State 12 State identification no.
13 State tax withheld
B1.2
PBC
PBC 1099-INT 3 Student Copy
PAYER's name, street address, city or town, province or state, country, ZIP or foreign
postal code, and telephone no.
City of Lubbock
1234 Main Street
Lubbock, TX 79407
USA
(806) 458-9890
PAYER's federal identification number
Payer's RTN (optional)
2022
1 Interest Income
Form
2 Early Withdrawal Penalty
Interest Income
1099-INT
Copy A
RECIPIENT'S identification number
3 Interest on U.S. Savings Bonds and Treas. Obligations
222-33-4444
RECIPIENT'S name
4 Federal income tax withheld
5 Investment expenses
6 Foreign tax paid
7 Foreign country or U.S. possession
Kourtney Smith
Street address (including apt. no)
4646 19th St.
City or town, province or state, country, and ZIP or foreign postal code
Lubbock, TX 79401
Account number (see instructions)
8 Tax-exempt interest
A
$
2nd TIN not. 10 Tax-exempt bond CUSIP no.
9 Specified private activity bond interest
198.00
11 State 12 State identification no.
Form 1099-INT
For Instructional Purposes only - Not an official tax form
A
198 1040 Line 2a
13 State tax withheld
B1.3
PBC
PBC 1099-MISC 1 Student Copy
PAYER's name, street address, city or town, province or state, country, ZIP or foreign
postal code, and telephone no.
Sam Johnston
602 East 19th Street
Lubbock, TX 79404
USA
(575) 989-0323
PAYER's federal identification number
1 Rents
E-1
$
7,800.00
2 Royalties
RECIPIENT'S identification number
2022
Miscellaneous Income
3 Other income
Form 1099-MISC
4 Federal income tax withheld
5 Fishing boat proceeds
6 Medical and health care payments
7 Nonemployee compensation
8 Substitute payments in lieu of dividends
or interest
9 Payer made direct sales of $5,000 or
more of consumer products to a buyer
(recipient) for resale
10 Crop insurance proceeds
11 Foreign tax paid
12 Foreign country or U.S. possession
13 Excess golden parachute payments
14 Gross proceeds paid to an attorney
16 State tax withheld
17 State/Payer's state no.
Copy A
111-22-3333
RECIPIENT'S name
Scott Smith
Street address (including apt. no)
4646 19th St.
City or town, province or state, country, and ZIP or foreign postal code
Lubbock, TX 79401
Account number (see instructions)
15a Section 408A deferrals
15b Section 409A income
Form 1099-MISC
For Instructional Purposes only - Not an official tax form
18 State income
E1.1
PBC
PBC 1099-MISC 2 Student Copy
PAYER's name, street address, city or town, province or state, country, ZIP or foreign
postal code, and telephone no.
HP Oil Company
2185 Ranger Parkway
Arlington, TX 76001
USA
(800) 123-4567
PAYER's federal identification number
1 Rents
2 Royalties
E-1, A$
RECIPIENT'S identification number
8,675.00
2022
Miscellaneous Income
3 Other income
Form 1099-MISC
4 Federal income tax withheld
5 Fishing boat proceeds
6 Medical and health care payments
7 Nonemployee compensation
8 Substitute payments in lieu of dividends
or interest
9 Payer made direct sales of $5,000 or
more of consumer products to a buyer
(recipient) for resale
10 Crop insurance proceeds
11 Foreign tax paid
12 Foreign country or U.S. possession
13 Excess golden parachute payments
14 Gross proceeds paid to an attorney
16 State tax withheld
17 State/Payer's state no.
Copy A
111-22-3333
RECIPIENT'S name
Scott Smith
Street address (including apt. no)
4646 19th St.
City or town, province or state, country, and ZIP or foreign postal code
Lubbock, TX 79401
Account number (see instructions)
15a Section 408A deferrals
15b Section 409A income
Form 1099-MISC
For Instructional Purposes only - Not an official tax form
A 8675
Depletion % 15%
1301
SALY
E-1
18 State income
E1.2
PBC
PBC W-2 1 Student Copy
22222
a Employee's social security number
222-33-4444
b Employer identification number (EIN)
1 Wages, tips, and other compensation
75-1111111
$
c Employer's name, address, and ZIP code
55,400.00
3 Social security wages
55,400.00
5 Medicare wages and tips
$
d Control number
Last name
Suff.
5,540.00
$
3,434.80
6 Medicare tax withheld
55,400.00
$
803.30
7 Social security tips
8 Allocated tips
9
10 Dependent care benefits
11 Nonqualified plans
12a
Code
e Employee's first name and Initial
$
4 Social security tax withheld
$
Lubbock ISD
1628 19th Street
Lubbock, TX 79401
Statutory Retirement Third-party
employee plan
sick pay
12c
Code
14 Other
12b
Code
13
Kourtney Smith
4646 19th St.
Lubbock, TX 79401
Code
12d
f Employee's address and ZIP code
15 State
Employer's state ID number
W-2
16 State wages, tips, etc.
Wage and Tax
Statement
Form
For Instructional Purposes only - Not an official tax form
17 State income tax
18 Local wages, tips, etc.
19 Local income tax
2022
A 55400
B
Fed W/H
W1.1
2 Federal income tax withheld
1040 Line 1, 1040-1
5540
5540 1040 Line 17, 1040-1
20 Locality name
PBC
PBC W-2 2 Student Copy
22222
a Employee's social security number
222-33-4444
b Employer identification number (EIN)
1 Wages, tips, and other compensation
75-3433434
$
c Employer's name, address, and ZIP code
3 Social security wages
16,800.00
5 Medicare wages and tips
$
d Control number
Suff.
1,680.00
$
1,041.60
6 Medicare tax withheld
16,800.00
$
243.60
7 Social security tips
8 Allocated tips
9
10 Dependent care benefits
11 Nonqualified plans
12a
Code
Last name
$
4 Social security tax withheld
$
Kids 'R Smart Tutoring
608 N Brentwood Ave
Lubbock, TX 79416
e Employee's first name and Initial
2 Federal income tax withheld
16,800.00
Statutory Retirement Third-party
employee plan
sick pay
12c
Code
14 Other
12b
Code
13
Kourtney Smith
4646 19th St.
Lubbock, TX 79401
Code
12d
f Employee's address and ZIP code
15 State
Employer's state ID number
W-2
16 State wages, tips, etc.
Wage and Tax
Statement
Form
For Instructional Purposes only - Not an official tax form
17 State income tax
18 Local wages, tips, etc.
19 Local income tax
2022
A 16800
B
Fed W/H
1040 Line 1, 1040-1
1680
1680 1040 Line 17, 1040-1
20 Locality name