Overview
Comprehensive Tax Return
ACCT 340
Daniel B. Butler and his spouse Freida C. Butler file a joint return. The Butlers live at 625 Oak
Street in Corbin, KY 40701. Daniel’s Social Security number is 111-11-1112, and Freida’s is 123-
45-6780. Dan was born on January 15, 1971, and Freida was on August 20, 1971.
During 2024, Daniel and Freida furnished over half of the total support for each of the following
individuals, all of whom still live at home:
a. Gina, their daughter, age 22, a full-time student, who married on December 21, has no
income of her own and did not file a joint tax return with her husband, Casey, who earned
$10,600 during 2023. Gina’s Social Security number is 123-45-6788.
b. Willie, their son, age 19, graduated from high school in May 2023. He is taking a gap year
and will not begin college until 2024. He has gross income of $6,300 in 2024. Willie’s Social
Security number is 123-45-6787.
c. Ben, their oldest son, age 26, is a full-time graduate student with gross income of $5,200.
Ben’s Social Security number is 123-45-6786.
Daniel was employed as a manager by WJJJ, Inc. (Employer ID number: 11-1111111), 604
Franklin Street, Corbin, KY 40702), and Freida was employed as a salesperson for Corbin
Realty, Inc (Employer ID number: 98-7654321, 899 Central Street, Corbin KY 40701).
Selected information from the W-2 Forms provided by the employer for 2024 is presented
below:
Line Description Daniel Freida
1 Wages, tips, other compensation $74,000 $86,000
2 Federal income tax withheld 11,000 12,400
17 State income tax withheld 2,960 3,440
Freida sold a house on December 30, 2024, and will be paid a commission of $3,100 (not
included in the $86,000 reported on W-2) on January 10, 2025, closing date.
Other income (as reported on 1099 forms) for 2024 consists of the following:
Dividends on CSX stock (qualified) $4,200
Interest on savings at Second Bank $1,600
Interest on City of Corbin bonds $900
Interest on First Bank CD $382
The $382 from First Bank was an original issue discount. Daniel and Freida collected $16,000
on the First Bank CD that matured on September 30, 2024. The CD was purchased on October
1, 2019, for $14, 995, and the yield to maturity was 3.3%. Daniel participated in a game show
and won a cash prize of $7,000.
1
In addition to the above information, Daniel and Freida’s itemized deductions included the
following:
Paid on 2024 Kentucky income tax $700
Personal property tax paid $600
Real estate taxes paid $1,800
Interest on home mortgage (Corbin S&L) $4,900
Sales tax from the sales tax table is $1,860. Daniel and Freida made Federal estimated tax
payments of $6,000. They have never owned or used any digital assets, and they do not wish to
contribute to the Presidential Election Campaign. The Kentucky income tax rate is 4%.
Required:
Compute Daniel and Freida’s 2024 Federal income tax payable (or refund due) and complete
their 2024 tax return using the appropriate forms and schedules. Submit Form 1040 o