2023 1040 form 1.Phillip and Claire are married and file a joint return. Phillip is self-employed as a real estate agent, and Claire is a flight attendant. Phillip and Claire have three dependent children. All three children lived at home with Phillip and Claire for the entire year.The Dunphys provide you with the following additional information:•The Dunphys do not want to contribute to the presidential election campaign.•The Dunphys live at 3701 Brighton Avenue, Los Angeles, California 90018.•Phillip’s birthday is 11/5/1977 and his Social Security number is 321-11-5766.•Claire’s birthday is 5/12/1980 and her Social Security number is 567-11-1258.•Haley’s birthday is 11/6/2011 and her Social Security number is 621-11-7592.•Alex’s birthday is 2/1/2013 and her Social Security number is 621-11-8754.•Luke’s birthday is 12/12/2017 and his Social Security number is 621-11-9926.•The Dunphys do not have any foreign bank accounts or trusts.2.Claire is a flight attendant for Western American Airlines (WAA), where she earned $57,000 in salary. WAA withheld federal income tax of $6,375, state income tax of $1,800, Los Angeles city income tax of $675, Social Security tax of $3,600, and Medicare tax of $825.3.Phillip and Claire received $300 of interest from State Savings Bank on a joint account. They also received a qualified dividend of $395 on jointly owned stock in Xila Corporation.4.Phillip’s full-time real estate business is Phillip Dunphy Realty. His business is located at 645 Grove Street, Los Angeles, California 90018, and his employer identification number is 93-3488888. Phillip’s gross receipts during the year were $730,000. Phillip uses the cash method of accounting for his business. Phillip’s business expenses are as follows:AdvertisingRent $ 5,000 15,515Professional dues 800 Professional journals 200 Employee wages 48,000 Insurance on office contents 1,120 Accounting services 2,100 Miscellaneous office expense 500 Utilities and telephone 3,360 Payroll taxes 3,600 DepreciationTo be calculated5.On March 20, 2023, Phillip moved his business out of the old offices at 1103 Allium Lane and into a newly constructed and equipped office on Grove Street. Previously, Philip previously rented furnished and equipment office space, therefore he does not have to record depreciation on assets placed in service in prior years, nor does he have a sale of business assets. Phillip’s expenditures for the new office building are as follows:Date Acquired Asset Cost3/20/2023Land$ 300,0003/20/2023Office building 2,500,0003/20/2023Furniture 200,0004/1/2023Computer system 350,0006/1/2023Artwork 150,000Note that the Artwork is not expected to depreciate in value nor be subject to normal wear and tear.6.Phillip computes his cost recovery allowance using MACRS. He would like to use the §179 immediate expensing for the furniture and computer system. He has elected to not claim any bonus depreciation. Phillip has never claimed §179 or bonus depreciation before.7.Phillip and Claire donated $350 to the Salvation Army during 2023.8.The Dunphys sold 60 shares of Fizbo Corporation common stock on September 3 for $65 a share (minus a $50 total commission). The Dunphys purchased the stock on November 8, 2022, for $90 a share. They also sold a painting for $13,000 on March 1. Claire purchased the painting for $20,050 on September 1, 2014, as an investment.9.The Dunphys filed their 2022 federal, state, and local returns on April 13, 2023. They paid the following additional 2022 taxes with their returns: federal income taxes of $630, state income taxes of $250, and city income taxes of $75.10.The Dunphys did not buy, sell, exchange, or otherwise acquire any financial interest in a virtual currency.