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Following is a list of information for Michael and Diana Lapin for the tax year $2023.$ Michael and Diana are married and have three children, Amara, Bryan, and Skyla. They live at $120$ Main Street, Flushing NY $11425.$ Michael is a Business Law Professor teaching at BMCC $$ CUNY. Diana works part$-$time for Creation, a genetic research lab. The Lapins' and their dependents$$ information is as follows:

Name Social Security No$.$ Age Other Facts

Michael $111-11-111152$ Business Law Professor at BMCC $-$ CUNY

Diana $222-22-222247$ Geneticist. Diana was unemployed for $2023.$ However, she was not actively looking for employment. She decided to take a year off before reentering the work force.

Amara $($daughter$)333-33-333320$ Full$-$time student at Queens College; her gross income is $$18,500.$

Bryan $($son$)444-44-444415$ High School Senior. Works after school at Burger King. Gross income is $$4,400.$

Skyla $($daughter$)666-66-666612$ Attends Saint Francis Middle School.

Lorraine Kingston $($Diana$$s mother$)777-77-777775$ Retired Nurse $$ over $52\%$ of her support comes from the Lapin$$s$.$ She resides in a nursing home.

Edward Lapin $($Michael$$s Uncle$)888-88-888857$ Lives in NJ$,$ receives $50\%$ support from Michael and Diana. Earns $$6,000$ a year from a part$-$time job.

Evelyn Benjamin $999-99-999947$ Michael$$s ex$-$wife $($Do not consider as dependent$)$

Terrence Kingston $100-00-000015$ Bryan$$s cousin lived with the Lapin$$s for the entire year. He is a full$-$time student at BMCC and had no earned income during the year.

Dependents: Assume that all other requirements are met by each potential dependent.

Michael$$s Previous Marriage:

Michael is obligated to pay Alimony of $$600$ and child support of $$1,000$ monthly to Evelyn based upon their divorce decree dated $11/20/2015.$ All payments were made on time and no previous arrears existed. However, as of December $31,2023,$ he had only paid a total of $$13,000.$ Michael and Evelyn both agreed that the outstanding balance will be paid in January $2024.$

The Lapin$$ W$-2$ information is as follows:

Michael Diana

Gross wages $112,500-0-$

Federal Withholding Taxes $32,600-0-$

NYS Withholding Taxes $6,200-0-$

NYC Withholding Taxes $3,450-0-$

Interest earned by the Lapin are as follows:

Types: Amounts

Interest on $3\mathrm{.}75\%20$ year US Treasury Bonds $3,250$

Interest on NYS $4\%$ General Obligation Bonds $2,500$

Interest on N$.$J$.3\mathrm{.}75\%$ State Dormitory Bonds $5,000$

Interest on CD $$ Chase Bank $1,250$

Besides teaching at BMCC$,$ Michael also has his own private consulting practice $($Lapin Legal Consultancy, LLC$,$ EIN: $55-5687541,$ Business code: $541110,$ Accounting method: Cash Basis$),$ located at $195$ Chambers street, New York, NY $10007.$ The income and expenses associated with his practice are as follows:

Gross Receipts $$386,125$

Rent $125,000$

Office Salaries $75,000$

Payroll Taxes $15,475$

Office Supplies $11,000$

Advertisement $9,000$

Utilities $8,000$

Parking Violation Fines $2,350$

Phone$/$Internet $3,000$

Accounting Fees $12,000$

Health Insurance Plan $$ Employees $15,000$

Office Maintenance & Repairs $5,000$

Office Equipment $($see Note $1)30,000$

Travel $($see Note $2)3,000$

Cleaning Supplies $1,500$

Estimate Taxes $($see Note $3)15,000$

Note $1$ the category office equipment includes printers, computers, fax machines, percolators, phones, microwave, and office refrigerator. The items were placed in service during $2023.$ Michael is unfamiliar with the tax treatment and therefore requires your help. He is greatly concern with the tax benefits available for the costs incurred for office equipment. Hint: should he capitalized and depreciate the equipment cost, or is there another available tax treatment?

Note $2$ Michael visited his mother who lives in Miami, where he spent a total of three days. He used his business card to secure a cheaper flight. The $$3,000$ cost includes flight and car rental services.

Note $3$ Lapin Legal Consultancy, LLC$,$ paid federal estimate taxes of $$10,000$ and NYS estimate taxes of $$5,000.$ These taxes were paid to avoid penalties for tax underpayment for $2023.$ Hint: Do not include these payments in Schedule C but rather think carefully where on the return they belong.

Group Term Life Insurance

BMCC provides $$125,000$ of group term life insurance for Michael, who is not a key employee. $($Hint: don$$t forget to consider its effect on gross income $$ chapter $4).$

Unemployment Insurance

During $2023,$ Diana received unemployment insurance from New York State. She received Form $1099$ G which stated that she had received a total of $$15,250$ and her federal tax withholdings were $$1,525.$ No state taxes were withheld.

Retirement Contributions

During $2023,$ Michael contributed $$6,500$ to his Traditional IRA accounts, and Diana contributed $$5,000$ to her Roth IRA account. Michael is currently covered by a retirement plan with Teacher$$s Retirement System $($TRS$)$ at BMCC$.$

NYS Tax Refund

Mr$.$ & Mrs$.$ Lapin received a $1099$ for $$2$

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