Group Tax Return Project Week 10: Business Activity Connor and Jordan Billings are married taxpayers. Connor works part-time in retail and Jordan works part-time at an elementary school. Their details are shown below: Name Connor R. Billings Jordan M. Billings Date of Birth 06/01/1956 05/24/1964 SSN 123-45-6789 987-65-4321 The couple's W-2s include the following information: Taxpayer Connor Jordan Wages 23,100 21,200 Occupation Retail Sales Teacher's Aide Federal Withholdings State Withholdings 2,100 1,050 2,050 950 Connor retired last year and received social security benefits this year. His 1099-SA includes the following information: Taxpayer Connor Social Security Benefits Received 18,000 Connor and Jordan received 12 payments of $6500 this year from an annuity they purchased several years ago. Payments began when Connor turned 65. The annuity cost $200,000. When Connor dies, Jordan will receive the same monthly payment until Jordan's death. Use the simplified method to calculate taxability of the annuity payments received. Jordan enjoys buying lottery tickets this year. This year, Jordan spent about $50 total on scratch- off tickets but managed to win $12,000! Connor sold the following stock this year: Security ALBT BNR CXY Date Acquired 6/7/2006 1/4/2008 2/2/2023 Cost $22,000 $2,000 Date Sold Proceeds 3/4/2023 $31,000 3/4/2023 $250 $1,400 3/4/2023 $2,200 Connor and Jordan recently moved to a smaller home. They kept their previous residence as a rental property. The following expenses were incurred this year: Rents received Property Taxes Property Insurance Landscaping Maintenance Service Property Management Service Depreciation $18,000 4,300 1,200 600 1,200 3,500 Jordan is a limited partner in the Mt Hood Cascades Adventures partnership. Jordan's K-1 showed a $3,000 ordinary loss and $1,200 long-term capital loss. Connor and Jordan both contribute the maximum deductible amount allowed to their IRA accounts. Neither taxpayer is eligible for an employer-sponsored plan. The couple also contributes the maximum amount allowed to their Health Savings Account. Jordan spent $475 this year on supplies for the third-grade classroom to which she is assigned at work. Connor and Jordan's Form 1098 from their mortgage lender shows the following information: Mortgage Interest Paid Property Taxes Paid $12,000 $5,200 In addition, Connor and Jordan paid the following medical expenses during the year: Physician Office Visits Dental Office Visits Hospitalization Hearing Aids Glasses Dentures Prescriptions Medicare Premiums Paid $600 $400 $2,500 $1,200 $840 $2,000 $6,200 $2,100 They used their Health Savings Account to pay for $7,200 of these expenses, but the rest were unreimbursed. Connor and Jordan also made the following charitable contributions during the year: Cash donation to United Way $1,200 Cash donation to Jordan's school fundraiser Cash donation to Humane Society $500 $600 Old car to Humane Society FMV $2,200 Miscellaneous Household Items to Goodwill $600 (estimated thrift value; Connor has a list) Jordan's grandson, Carter, began living with the couple in April 2023. They provide all of his support. Carter's birthday is 3/14/2015. His social security number is 111-22-3333. The couple replaced all of the windows in their new home this year. They qualify as energy efficient improvements. The windows cost $8,500. They also purchased a new 2023 Chrysler Pacifica Hybrid for $48,500. The couple decided to start a side business this year. J&C adventures plans trips for families visiting the Portland area. Their expenses are as follows: Income/Expense Amount Subscription Fees $2,000 Planning fees $1,200 Advertising costs $600 Chamber of Commerce dues $200 Meals with customers when $2,200 they arrive in town Annual passes to area attractions $800 Notes Families subscribe to their substack Facebook ads They meet their customers at a restaurant upon arrival. They research the local attractions regularly to update the substack and provide the best advice to their clients J&C Adventures operates in the guest room of their home. The home is 2,000 sq. ft. and the guest room is 100 sq. ft. They do not maintain separate utilities for the business, but the home utilities totaled $2,600 this year. They also paid property insurance of $1,500 this year on their home. They also use their personal vehicle for research and welcome meals. They drove a total of 18,000 miles this year and 6,000 were business purpose. They started the business in July. Their automobile expenditures are as follows: Fuel Oil Changes and Tire Rotations Interest on the Pacifica loan Insurance Tag and License Fees 2,600 400 1,000 800 325 Complete the Form 1040 worksheet in Google Sheets for Connor and Jordan. Do not use tax software. Submit the Google Sheets file to Canvas with your group number at the end of the file name. Only one member of your group is required to submit the document because it is set up as a group assignment. You do not need to fill out a form 4562. Assume the amount provided for depreciation is correct and use it where necessary./n