I need help completing this Tax return. Attached is the necessary information. Thank you. Form 1040 return for Francisco and…

I need help completing this Tax return. Attached is the necessary information. Thank you. Form 1040 return for Francisco and Eva Martinez. The instructions are indicated at the bottom of the assignment.
Facts:
Francisco E. and Eva A. Martinez are married and live at 46 Milano Street Raleigh NC 27513. They file a joint return and are calendar year cash basis taxpayers.
Francisco is a self-employed accountant (professional activity code is 541213). He maintains an office at 65 Oreo Way Suite 105 Raleigh NC 27514. Francisco’s work-related expenses for 2015 are as follows:
Office rent (prepaid 12 months on 6/1/2015)$18000
Utilities2400
Office expenses (supplies etc.)4800
Fines issued by Raleigh zoning department related to business300
Tolls (business related)550
Parking expense (business related)250
State and local license fees600
Renter’s insurance (prepaid 18 months on 6/1/2015)1800
Replacement of reception room furnishings (10/5/2015)3000
Purchased Apple iMac (business related)2500
Meals1400
Entertainment (Carolina Panthers tickets with clients)3000
Travel1800
As is the case with all of Francisco’s business transactions the meals and entertainment expenses are properly documented and supported by receipts. The meals and entertainment expense relates to taking clients out to eat and discussing business during the meals. Francisco would then take the client/clients across the street to see home Carolina Panthers football games. No business was discussed during or after the games. Francisco uses MACRS and bonus depreciation for expensing computer and furniture. Francisco traveled to Orlando for a 2 day accounting convention and stayed an extra 3 days for sightseeing. Travel expense is composed of the following ($400 airfare round-trip; $200/night hotel which offers free meals $50/day rental car $30/day incidental expenses). Of 14000 total miles driven in 2015 Francisco drove his truck (a Toyota Tundra purchased on 8/1/2012) 7500 miles for business (not including commuting). The Martinez’s use the automatic mileage method of claiming automobile expenses.
2.Eva works as a sales executive for Avis rental cars. She receives several fringe benefits including group health insurance for her family. She purchased a new Mercedes from Avis for $50000 when the FMV was $80000. The purchase cost for Avis from Mercedes was $60000. Eva’s company offers free group term life insurance for all their employees. Eva received $100000 in life insurance coverage in 2015 that cost Avis $10 per $1000 of coverage. Eva drives to various sales meetings away from her primary place of business. As a result she drove 18000 miles in 2015 of which 7000 was business related. Eva uses standard mileage deduction.She also incurred $500 in tolls. Eva’s company uses an accountable plan and reimbursed her for her mileage and tolls.
3. On September 1 2012 the Martinez’s purchased a house in Augusta GA located on the National Golf Club of Augusta home of the Masters Golf Championship. The house is held as a rental investment. The property cost $900000 (of which $400000 is allocated to the land) and is located at 1606 Jack Nicklaus Way Augusta GA 30904. The Martinez family resided in the house for personal recreation totaling 30 days and rented the house out 160 days in 2015. $48000 in gross rental receipts was collected in 2015. The Martinez’s allocate rental expenses per the IRS Method. They use MACRS straight-line depreciation assuming the mid-month convention.
Information regarding the rental property expenses for 2015 are summarized below:
Refundable damage deposit4000
Property taxes9800
Interest on mortgage14500
Repairs4800
Insurance2500
Utilities3000
Maintenance$8800
Francisco bought 400 shares of Apple stock on January 1 2013 for $200 per share with a brokerage fee of $1000. Francisco sold 100 shares for $140 per share on November 12 2015. Francisco then purchased 100 shares of the same type of Apple stock on December 10 2015 for $138 share. No brokerage fee was incurred on the 2015 transactions.
Eva had the following stock sales in 2015:
Date Purchased
Basis
Date Sold
Amount Realized
Stock 1
3/16/1996
$7850
7/22/2015
$6500
Stock 2
2/12/2015
15000
9/13/2015
19500
Stock 3
6/25/2011
11750
10/12/2015
15600
Stock 4
7/19/2006
8250
10/12/2015
12800
Stock 5
9/18/2015
9400
11/26/2015
4500
Besides those previously noted the Martinez’s had the following receipts for 2015:
Payment for services rendered as an accountant
(as supported on Forms 1099 issued by several
payor client companies)$110000
Eva’s W-2 wages (total includes $30000 in 401K plan)$180000
Golf cart(see information below)
Income tax refunds for tax year 2014
Federal tax$6400
State tax7800$14200
Interest income–
CitiBank$4800
Raleigh Durham municipality6600
$11400
Gambling income$3200
Francisco performed accounting services for a client in exchange for a used golf cart. The accounting services performed would have been charged at $4000 to the client. The client’s golf cart had a FMV of $3500 and he had previously paid $5000 for the cart. So the transaction was a barter.
6.In addition to any items previously noted the Martinez’s had the following expenses for 2015:
Medical and dental expenses not covered by
Insurance$7000
Real estate tax on personal residence4600
Interest
Home mortgage$6800
Interest on home equity loan22009000
Charitable contributions(See information below)
Gambling expenses(with proof of payment)4500
Of the $7000 in medical expenses $2000 was used to pay for an urgent care clinic visit for Benjamin Martinez Francisco’s brother who is not a dependent. Benjamin was visiting Francisco and injured his back while assisting in cleaning out the garage. The remaining $4700 was used to cover co-payments and uninsured medical and dental procedures for Eva and their children. The remaining $300 was for purchases of over the counter medications.
During 2015 Francisco borrowed $90000 through a home equity loan to pay off other debts and take his family on a 3 week trip to Pebble Beach CA. At the time of this loan the FMV of their home was $420000 and the outstanding home mortgage was $340000.
The charitable contributions were all made to qualified charitable organizations as follows: $10000 cash donated to their church; The Martinez’s also donated a Ford 150 truck to their son’s school. The truck’s basis was $25000 and the FMV at the time of donation was $16000.
7. The Martinez’s’ household includes their three children: Diego Victoria and Thomas. Victoria and Thomas are full-time students and live fulltime at their home. Diego lived at home all year and is attending University of North Carolina full time and he also works doing tile and pavement cleaning and earned $8000 in 2015. The Martinez’s provide more than half of each of the children’s living expenses.
8.Eva’s Form W-2 from Marriott Inc. shows $40000 withheld for Federal income tax and $9941 for state income tax. Francisco made equal quarterly payments of $7000 (Federal) and $1000 (state). Relevant Social Security numbers are noted below.
Social Security
NameNumberBirth Date
Francisco L. Martinez123-45-678907/01/1967
Eva S. Martinez123-45-678206/27/1968
Diego Martinez123-45-678604/09/1992
Victoria Martinez123-45-678312/06/1999
Thomas Martinez123-45-678107/29/2000
Prepare an income tax return by hand inbluepen (no tax software) with provided schedules that were obtained from the IRS website (irs.gov) for the Martinez’s for 2015. In doing this use the following guidelines:
You may complete assignment individually or in groups up to 5 people. Place all participating student names on cover sheet.
Make necessary assumptions for information not given in the problem but needed to complete the return. Be aware of the possible application of certain tax credits.
The taxpayers have the necessary substantiation (e.g. records receipts) to support the transactions involved.
If a refund results the taxpayers want it sent to them.
The Martinez’s do not wish to contribute to the Presidential Election Campaign fund.
In the past several years the Martinez’s have itemized their deductionsfromAGI (have not claimed the standard deduction option). In 2014 they claimed $19600 in itemized expenses.