1. Ken (age 31) and Amy (age 28) Booth have brought you the following information regarding their income, expenses, and withholding for the year. They are unsure which of these items must be used to calculate taxable income.

Income:

Ken’s salary (salesman) $27,200 Amy’s wages (office clerk) 18,200 Insurance reimbursement for repairs from an auto accident 500 Gift from Uncle George 2,000 Interest income from Lodge State Bank 640 Federal income taxes withheld:
From Ken’s salary 1,200 From Amy’s wages 650 The Booths incurred the following expenses during their move from California to Maine in January of 2010:
Cost of moving furniture $4,300 Transportation (4,509 miles at $.165) 744 Lodging en route 150 Meals en route 90 House-hunting trip before the move 750 Ken’s previous job, as a manager in a carrot-processing plant in California, was only 5 miles from his home. Amy was unemployed prior to the move.
The Booths support Ken’s parents, Rod (Social Security number 124-80-9050) and Mary (Social Security number 489-37-6676) Booth, who live in their own home. Ken and Amy live at 2345 Park Ave, Bellview, ME 04104, and their Social Security numbers are 343-75-3456 (Ken) and 123-45-7890 (Amy).
Required: Complete the Booths’ federal income tax return for 2010. Use Form 1040, Form 3903, and Schedule M, on pages 4-55 to 4-58, and any other appropriate schedule(s) you need to complete this tax return.