Kelly and Chanelle Chambers, ages 47 and 45, are married and live at 584 Thoreau Drive, Boston, MA 59483. Kelly’s Social Security number is 111-11-1111 and Chanelle’s is 222-22-2222. The Chambers have two children: Emma, age 23, and Chet, age 19. Their Social Security numbers are 333-33-3333 and 444-44-4444, respectively. Emma is a single college student and earned \($8,000\) during the summer. Kelly and Chanelle help Emma through school by paying for her room, board, and tuition. Emma lives at home during the summer. Chet has a physical handicap and lives at home. He attends a local university and earned \($4,000\) working for a marketing firm. In sum, Kelly and Chanelle provide more than 50% of both Emma’s and Chet’s total support for the year. Kelly is a commercial pilot for a small airline. His salary is \($95,000,\) from which \($19,000\) of federal income tax and \($8,000\) of state income tax were withheld. Kelly also pays premiums for health, disability, and life insurance. \($2,000\) of the premium was for health insurance, \($250\) for disability, and \($400\) for life insurance. Chanelle owns Alliance Networks, a proprietorship that does network consulting. During the year, Chanelle’s gross revenues were \($23,000.\) She incurred the following expenses in her business:

Kelly enjoys playing guitar and plays in a band. Kelly’s band has developed a local following. This year, his gross revenues were \($1,200\) for playing shows and \($700\) on CD sales. He incurred the following expenses:

Kelly’s father passed away during the year. Kelly and Chanelle received \($100,000\) from the life insurance policy. Neither Kelly nor Chanelle paid any of the premiums.
Chanelle purchased 100 shares of Thurston Co. stock on May 1, 1993, for \($1,000.\) Thurston Co. was declared bankrupt during the current year.
Chet’s physician recommended that he see a physical therapist to help with his disability. Kelly paid the therapist \($7,000\) during the year because his insurance would not cover the bills. Kelly and Chanelle went to Las Vegas and won \($5,000\) at the blackjack table. The next night, they lost \($6,000.\) Kelly and Chanelle gave \($900\) to their church and, during the year, they had the following other income and expenses:

Prepare Kelly and Chanelle’s tax return Form 1040 and Schedules A, B, C, D, and SE for 2022. Assume the couple had no transactions involving virtual currency.

Data From  Form 1040

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Liability insurance Software rental Journals and magazines Training seminars Supplies Donations to a political campaign fund $ 700 5,400 150 1,200 1,300 800