Research Paper in Labor Economics

ACCT 316: “Game of Life” Tax Return #3 Group Project:

Various life events and transactions provide us with the information needed for an individual’s Federal income tax return.  In this project, your group will play the role of tax preparer, as well as client.  You will gather key information for your client’s tax return by playing “The Game of Life”. One pass through the game will represent one year in the life of your client (sort of).  As is usually the case, the client will not have given you all of the necessary information to prepare a tax return the first time around.  You will need to fill in the blanks in order to prepare a finished product.

Instructions:

Based on the information gathered from your “Game of Life” and the additional information provided in class, do the following as a group:

• Prepare a fact scenario that includes all of the information needed to prepare a complete individual income tax return.  Add facts to the information gathered above, as necessary.

• Use your earlier tax return projects as a model
• Make sure you have provided all of the information necessary for anyone else to prepare the tax return

• Prepare the 2015 individual income tax return based on your fact scenario. Ignore alternative minimum tax.
• For items in your fact scenario, but not included on your tax return, explain why they have been excluded (this can be included in the same document as your fact scenario).

At a minimum your tax return should include the following:

• Form 1040
• Schedule A
• Schedule C
• Schedule D
• Schedule SE
• Form 4562
• Form 8949

Submit on Canvas the following:

1. Fact scenario with explanation of exclusions
2. Completed tax return
3. Depreciation calculation
4. Worksheets or calculations for any phase-outs or other items as you deem necessary

**Each member should also complete a self-evaluation and peer evaluation for each member of the group.

ACCT 316, Game of Life

Additional Information

After finishing the game, you will need to supplement the gathered information with the following and anything else you feel is necessary.  Make sure you include all of this additional information on your fact sheet:

• Names, addresses, social security numbers, birth dates

• Assume that your children were not all born in the same year and that at least one child is under age 17

• Federal income tax and state income tax withholdings on wages (estimate the amounts)
• Federal estimated payments – optional
• Itemized deductions – required:

• Medical expenses
• Taxes
• Interest
• Charitable contributions

• Deductions for your Schedule C business, including assets that need to be depreciated.

Additional information to be included on your tax return:

• Sale of Blue, Inc. stock for $45,000 on March 12, 2015.  Your taxpayer purchased the stock on September 5, 2011, for $50,000.
• Received an inheritance of $300,000 from your Uncle Bernie.  You used $200,000 to purchase Green, Inc. stock on May 15, 2015, and invested $100,000 in Gold, Inc. stock on May 30, 2015.
• Received Orange, Inc. stock worth $9,500 as a gift from Aunt Betty on June 17, 2015.  Betty’s adjusted basis for the stock was $5,000.  No gift taxes were paid on the transfer.  Aunt Betty had purchased the stock on April 1, 2008.  You sold the stock on July 1, 2015 for $22,000.
• On July 15, 2015, you sold one-half of the Green, Inc. stock for $40,000.
• On August 1, 2015, you were notified that the Yellow, Inc. stock that you purchased on September 11, 2014 for $52,500 had become worthless.

The Game of Life

Game Guide for ACCT316

Set up:

• Each group receives 1 car, 1 token and 1 person (peg)
• Split the cards into 5 decks

• House cards
• Action cards with a “B” on them
• Action cards
• Career cards
• College Career cards

• Do not use the money.  Instead, one member of your group will write down all of your transactions. (All transactions should be written down regardless of whether you feel they will affect the tax return or not.  Be very detailed in your note-taking!)
• Choose your path before you start:

• Choose College?

• If you choose college, make a note that you will pay $25,000 in tuition and fees for the year

• Choose Career?

• Take the top 2 Career cards from the Career deck, choose your favorite and place it face-up in front of you.  Return the other to the bottom of the deck.

• Put your person in your car and place it on the start space next to your chosen path

Play:

• Spin the spinner and move forward that number of spaces

• Stop immediately if you hit a STOP! Space (even if you have moves left).  Each STOP! Space is unique…see the back page.

• Ignore the bonus numbers on the Career cards

• Only collect PayDay once for each career.  You may have multiple careers/jobs.  Assume they all took place during one tax year.

• Every yellow space is an “Action” card:

• Collect an “Action” card at each yellow space and record/perform the action
• Each group must take at least one “Business” Action card (marked with a B).  This will be your Schedule C business.

• Spin to Win Spaces

• When someone lands on the “Spin to Win” space [pic 1], each group puts their token on a number on the Spin to Win wheel.
• Spin the spinner until a number with a token on it comes up.  That group wins $10,000.
• “Spin to Win” will be considered gambling winnings. Your group can decide if you have gambling losses.

• Baby spaces – if you land on baby spaces, add pegs to your car
• House spaces – if you land on this space, buy or sell a house

• Buy a house – take the top 2 House cards from the deck.  Choose your favorite and note the purchase price.
• Sell a house – Spin, check the center of the spinner to see if your spin is red or black and note the sale price.
• All groups must buy and sell a house.  If you have not sold the house by the end of the game, sell it at that time.

• Assume the house has been owned and occupied for over 2 years when you sell it

• Ignore the Retirement and End of Game portion of the game.

STOP! Spaces:

• Graduation STOP!

• Take the top 2 College Career cards, choose your favorite and return the other to the deck
• Spin again

• Get Married STOP!

• Pop a spouse in your car
• Spin for cash from the other group(s)

• Red – collect $1,000
• Black – collect $5,000

• Spin again

• Night School STOP! – Choose your path

• Night School – pay $25,000 for tuition and fees to go to night school

• Select a College Career card, return all other Career cards to the deck

• Continue Life – spin again and continue on the life path

• Family STOP! – All groups should take the family path
• Baby STOP! – Spin the spinner to see how many babies you get

• Add babies to your car
• Spin again

• Risky STOP! – Choose your path

• You can determine what the payments to and from the bank represent (loan proceeds, payments, etc)

...