In this course, we're going to take the knowledge you have acquired
in your previous four courses on US Federal Taxation,
and apply those to a hypothetical client scenario.
In addition, we're also going to take a closer look at some of the
major recent tax law changes that occurred at the end of 2017.
This course will consist of three modules.
At the conclusion of module one and two,
you will have a short quiz.
At the conclusion of module three,
you will have a more open-ended question which will be graded by your peers.
So, let's go ahead and take a look at our client scenario.
Remember if at any point you have a question
or want to refer back to any of the four prior courses,
you can access those through Coursera.
You are a Certified Public Accountant at Illini LLP,
a public accounting firm.
Your clients, Annie and Bobby Jones,
have come to you with some questions about their tax return.
Annie and Bobby are married with two children.
During the tax year,
Annie was a partner in Angels LLP,
a local architecture firm.
Annie received a Schedule K1 from Angels,
showing her distributed share of the partnerships items.
To account for her partnership income,
Annie also made several estimated tax payments to
both the IRS and Illinois throughout the year.
Bobby spent the year employed as the bakery manager of a local grocery store.
Bobby received a form W-2 from the grocery store,
reporting his wages and taxes withheld.
In addition to working at the grocery store, Bobby,
who has always had a passion for breakfast pastries began
to experiment with creating his own specialty donuts.
Initially, Bobby would bake the donuts at home,
on the weekends, and provide them to his friends and neighbors free of charge.
While preparing donuts for just friends and family,
he didn't really keep track of any expenses related to his donut baking.
But eventually, based on the positive reviews he received,
he decided to ramp up the doughnut production and began
selling his donuts on Saturday mornings at the local farmers market.
Bobby also accepted a few special catering requests
on his off days from the grocery store.
Once donut production ramped up,
Bobby began using some accounting software to keep track of his income and expenses.
In addition to the work in architecture and baking,
the couple also receives some distributions
from investments they had made in a couple of start-up businesses.
First, they received a distribution from Craft Ice Incorporated,
which specialized in the delivery of artisanal ices
directly to customers' doorsteps as part of an ice of the Month Club.
But, much like the corporations ice business,
the distribution was liquidating.
Annie and Bobby also received a cash distribution from
another business they invested in, Panda Prints Incorporated.
A company that sells office supplies with designs of red pandas.
Finally, Bobby and Annie also made
the following additional payments during the tax year: they paid student loan interest,
they paid mortgage interest expense on their home,
they paid local real estate taxes on their home,
they made some cash contributions to a local public charity,
and then lastly, they made a cash contribution to their local public television station.
But for this one, in return,
they received a box set of all five seasons of their favorite reality television show,
cought in wars.