QuestionAlice J. and Bruce M. Jones (cash basis taxpayers) are married and… Alice J. and Bruce M. Jones (cash basis taxpayers) are married and reside inWestchester at 10 William Street, White Plains, NY 10603. Alice’s birthday is September21, 1961 (SSN: 233-45-0098), and Bruce’s is June 27, 1960 (SSN: 109-33-9923). Alice isthe office manager for NY Dental Clinic. Bruce is the manager of Superfast Burgers, afast food outlet owned and operated by Burgers First Corporation.The Jones has two children, Cynthia (born January 25, 1999, Social Securitynumber 017-44-9126) and John (born February 7, 2000, Social Security number 017-27-4148), both of whom live with them. Cynthia is full-time college students and lives withher parents except when she is on summer vacation visiting Alice’s sister in France. Toassist in paying her tuition, Cynthia earned $10,250 from babysitting in 2020. John earned$3,200 from a part-time job but did not attend school in 2020. The Jones’ also have legalcustody of Elizabeth James, their niece, (born April 14, 2014, SSN: 223-33-4432) wholived with them since birth. Elizabeth James earned 52,000.00 in 2020 from childmodeling, all of which was placed in trust for her future benefit by her court appointedguardian.Other relevant information: Bruce has decided that he wants to minimize his tax liability as much as legallypossible and has requested your assistance in preparing his 2020 Federal incometax return. Bruce and Alice earned and received $4,350 interest income from a savingsaccount at Chase Bank in 2020. Alice earned interest of $1,975.00 from United States Treasury bonds, and$5,000.00 from NYS HWY Bonds in 2020. Only $3,750 of the NYS HWYbond interest was paid in 2020 and $1,250 paid in 2021; On January 29, 2020 Bruce received a stock dividend from Citibank. The FMVon the date the stock received was $3,500.00. The stock was purchased onNovember 23, 2019. The record date was December 31, 2019. Bruce alsoreceived an option of choosing to take the stock or receiving cash equal to thefair market value of the stock on January 29, 2020. In 2020, Bruce paid $25,000.00 in alimony to his ex-wife. The divorce wassettled on July 01, 2019.On December 31, 2020, Alice received a check for $21,500 from ConsolidatedTitle Agency LLC for consulting services performed during the year. Thecheck was dated December 31, 2020, but the company asked Alice to hold thecheck until January 05, 2021. Although Consolidated Title Agency had a zerodollars balance in its’ checking account on December 31, 2020, the companyhad a line of credit with the bank, which ensured that all checks written byConsolidated would be honored up to the company’s credit limited of $50,000.As of December 31, 2020, the available balance on the credit line was$35,000.00. On April 24, 2020, Alice found a gold watch, which she reported to the police.The Police held the watch for sixty days to see if someone would claim it, butno one came forth. On June 25, 2020, the police returned the watch to Alice tokeep. The watch was valued at 12,750 on June 25, 2020. Alice sold the watchon December 15, 2020 for $15,000.00. On December 31, 2019, Bruce received a check in the amount of $50,000.00from Mutual of America for life insurance benefits from his brother whorecently died and had named Bruce as the sole beneficiary. The check was datedDecember 28, 2019, but Bruce decided not deposit the check until January 03,2020. The Jones had been in negotiations with Bank of America to reduce theexcessive amount of credit card debt they had accumulated over the past severalyears. Finally, on October 7, 2020, Bank of America forgave $10,500.00 ofcredit card debt. Bruce and Alice 2020 W-2 statement shows the following wages andwithholdings:Bruce Alice1) Wages $75,000 $50,0002) FWT 9,800 8,2003) SWT 4,500 3,7004) CWT 3,700 2,500 The Jones also paid the following personal expenses in 2020:a. Contributions to Church $12,000Instructions: Make realistic assumptions about any missing or inconsistent data and stateyour assumptions on a separate typed schedule.Required:i. Prepare form 1040 for Bruce and Alice only, including all schedules and forms for2020. (Do not prepare NYS or NYC tax returns).LawSocial ScienceTax law ACCOUNTING ACC350

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