William and Harriet Bush are married and live at 2941 Florida Street, Arlington, Virginia 27018. William works for Sprint and Harriet for the Department of Agriculture. Harriet’s Social Security number is 654-65-6599 and William’s is 946-46-2123. Their earnings and income tax withheld for 2008 are:

William and Harriet have interest income of $1,512 from a savings account at Virginia State Bank. In addition, they own Bank of America stock, which paid them $2,788 in dividends during the year.

Harriet and William were married in March of the year. Prior to that, Harriet received alimony from her ex-husband Dan Applegate (Social Security number 656-65-1328). Pursuant to their divorce decree, Harriet received $500 per month in alimony. She received two payments during the year.

During the year, William was in the hospital for a successful colonoscopy. His health insurance company reimbursed William $3,407 for all of his hospital and doctor bills.

In June, Harriet’s father died. She was the beneficiary of his life insurance policy, paying her death benefits of $40,000.

Harriet bought a Super-Lotto ticket on impulse and she won $2,000 in cash, with no income tax being withheld.

Sprint provides William with a company car to drive while he is working. The Corporation spent $5,000 to maintain this vehicle during 2008. William never uses the car for personal purposes.

Required: Complete the Bushes’ federal tax return for 2008. Use Form 1040, Schedule B, and the Qualifying Dividends and Capital Gains Worksheet. Make realistic assumptions about any missing data.

Linda Coleman (Social Security number 444-55-666), age 66, is single and lives at 793 Lee Street, Leawood, Kansas 66101. She had the following items affecting her 2008 income tax.

Required: Complete Linda’s Form 1040 for 2008. Make reasonable assumptions when needed and use appropriate forms.