21. Christopher Crosphit (age 42) owns and operates a health club called "Catawba Fitness." The business is located at 4321 New Cut Road, Spartanburg, SC 29303. The principal business code is 812190. Chris had the following income and expenses from the health club: Income $216,100 Expenses: Business insurance 3,665 Office supplies 3,295 Payroll 98,900 Payroll taxes 9,112 Travel 2,420 Equipment & club maintenance 10,720 Cleaning service 8,775 Equipment rent 22,820 Utilities (electric, water, gas) 13,975 Telephone 2,778 Rent 32,590 Advertising 5,200 Special workout clothing and boxing gloves 780 Subscription to Biceps Monthly magazine 120 Educational seminar on weight training 770 Other expenses 1,830 The business uses the cash method of accounting and has no accounts receivable or inventory held for resale. Chris has the following interest income for the year: Upper Piedmont Savings Bank savings account $12,831 Morgan Bank bond portfolio interest 12,025 Chris has been a widower for 10 years with a dependent son, Arnold (Social Secu- rity number 276-23-3954), and he files his tax return as head of household. Amold is an 18-year-old high school student he does not qualify for the child tax credit. They live next door to the health club at 4323 New Cut Road. Chris does all the administrative work for the health club out of an office in his home. The room is 171 square feet and the house has a total of 1,800 square feet. Chris pays $20,000 per year in rent and $4,000 in utilities. Chris' Social Security number is 565-12-6789. He made an estimated tax payment to the IRS of $1,000 on April 15, 2018. Required: Complete Chris' federal tax return for 2018 on Form 1040, Schedule 1. Schedule 5, Schedule B, Schedule C, and Form 8829. Do not complete Form 4562 (depreciation). 650 1. Ken (birthdate July 1, 1987) and Amy (birthdate July 4, 1989) 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) $28,345 Amy's wages (part-time nurse) 17,490 Insurance reimbursement for repairs from an 500 auto accident Gift from Uncle George 2,000 Interest income from Lodge State Bank 833 Federal income taxes withheld: From Ken's salary 2,600 From Amy's wages Amy owns and operates a computer bookstore named "The Disk Drive." The store is located at 2000 Broadway Street, Menomonie, WI 54751. The business EIN is 27- 1234567 and the principal business code for bookstores is 451211. During 2018, Amy had the following income and expenses: Sales of books $320,985 Expenses Store rental 15,985 Office expense 6,150 Advertising 11,700 City business license 1,020 Payroll 83,550 Payroll taxes 8,392 Utilities 8,050 Other 3,000 Cost of inventory sold 184,855 Amy treats inventory as non-incidental materials and supplies. This year, Amy loaned a friend $10,000 so that he could make an investment. Instead of making the investment, the friend lost all the money gambling and left for parts unknown. Amy has no hope of ever collecting on this bad debt. Ken, who ordinarily never gambles, won $20,000 at a casino birthday party for one of his friends. The Booths provide the sole support for Ken's parents, Rod (Social Security num- ber 124-80-9050) and Mary (Social Security number 489-37-6676) Booth, who live in their own home. Ken and Amy live at 2345 Wilson Avenue, Menomonie, WI, 54751, and their Social Security numbers are 343-75-3456 (Ken) and 123-45-7890 (Amy). Required: Complete the Booths' federal income tax return for 2018 on Form 1040, Schedule 1, Schedule C, Schedule D, and Form 8949. A statement is required to be attached to a return for a nonbusiness bad debt, but this requirement may be ignored for this problem. Assume no 1099-B is filed in association with the bad debt when filling out Form 8949. 24. Russell (hirthdate February 2, 1967) and Linda Cirthdate August 30, 1972) Long have brought you the following information regarding their income and expenses for the current year. Russell owns and operates a landscaping business called Lawns and Landscapes Unlimited. The business is operated out of their home, located at 1244 Cherry Lane, Nampa, ID 83687. The principal business code is 561730. Russell's book keeper provided the following income statent from the landscaping business: Sei Casandalety Shon TOTAL OPERATING EXPENS NET INCOME NOSS (1,176.00 The bookkeeper provided the following additional information: Donations expense is a $600 donation to the Campaign to Re-Elect Senator Ami Dahla. Training includes $575 for an educational seminar on bug control. It also in- cludes the cost for Russell to attend an online certificate program in landscaping in order to improve his skills and advertise his designation as a certified land scaper. The tuition fees, and books cost $1,400. He also drove his personal car 57 miles round trip to Boise to take excams three times for a total of 171 miles. No business gift exceeded $22 in value. The business uses the cash method of accounting and has no accounts receivable or inventory held for resale. In addition to the above expenses, the Longs have set aside one room of their house as a home office. The room is 200 square feet and their house has a total of 1,600 square feet. They pay $12,600 per year rental on their house, and the utilities amount to $3,000 for the year. Interest from Idaho Bank and Trust bond portfolio $42,810 The Longs have two dependent children, Bill (Social Security number 123-23-7654) and Martha (Social Security number 345-67-8654). Both Bill and Martha are full-time high school students, ages 17 and 18, respectively. Russell's Social Security number is 664-98-5678 and Linda's is 554-98-3946. They made an estimated tax payment to the IRS of $2,500 on December 31, 2018 Required: Complete the longs' federal tax return for 2018 on Form 1040, Schedule 1, Schedule 5. Schedule Schedule and Form 8829. Do not complete Form 4542 (depreciation) 21. Christopher Crosphit (age 42) owns and operates a health club called "Catawba Fitness." The business is located at 4321 New Cut Road, Spartanburg, SC 29303. The principal business code is 812190. Chris had the following income and expenses from the health club: Income $216,100 Expenses: Business insurance 3,665 Office supplies 3,295 Payroll 98,900 Payroll taxes 9,112 Travel 2,420 Equipment & club maintenance 10,720 Cleaning service 8,775 Equipment rent 22,820 Utilities (electric, water, gas) 13,975 Telephone 2,778 Rent 32,590 Advertising 5,200 Special workout clothing and boxing gloves 780 Subscription to Biceps Monthly magazine 120 Educational seminar on weight training 770 Other expenses 1,830 The business uses the cash method of accounting and has no accounts receivable or inventory held for resale. Chris has the following interest income for the year: Upper Piedmont Savings Bank savings account $12,831 Morgan Bank bond portfolio interest 12,025 Chris has been a widower for 10 years with a dependent son, Arnold (Social Secu- rity number 276-23-3954), and he files his tax return as head of household. Amold is an 18-year-old high school student he does not qualify for the child tax credit. They live next door to the health club at 4323 New Cut Road. Chris does all the administrative work for the health club out of an office in his home. The room is 171 square feet and the house has a total of 1,800 square feet. Chris pays $20,000 per year in rent and $4,000 in utilities. Chris' Social Security number is 565-12-6789. He made an estimated tax payment to the IRS of $1,000 on April 15, 2018. Required: Complete Chris' federal tax return for 2018 on Form 1040, Schedule 1. Schedule 5, Schedule B, Schedule C, and Form 8829. Do not complete Form 4562 (depreciation). 650 1. Ken (birthdate July 1, 1987) and Amy (birthdate July 4, 1989) 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) $28,345 Amy's wages (part-time nurse) 17,490 Insurance reimbursement for repairs from an 500 auto accident Gift from Uncle George 2,000 Interest income from Lodge State Bank 833 Federal income taxes withheld: From Ken's salary 2,600 From Amy's wages Amy owns and operates a computer bookstore named "The Disk Drive." The store is located at 2000 Broadway Street, Menomonie, WI 54751. The business EIN is 27- 1234567 and the principal business code for bookstores is 451211. During 2018, Amy had the following income and expenses: Sales of books $320,985 Expenses Store rental 15,985 Office expense 6,150 Advertising 11,700 City business license 1,020 Payroll 83,550 Payroll taxes 8,392 Utilities 8,050 Other 3,000 Cost of inventory sold 184,855 Amy treats inventory as non-incidental materials and supplies. This year, Amy loaned a friend $10,000 so that he could make an investment. Instead of making the investment, the friend lost all the money gambling and left for parts unknown. Amy has no hope of ever collecting on this bad debt. Ken, who ordinarily never gambles, won $20,000 at a casino birthday party for one of his friends. The Booths provide the sole support for Ken's parents, Rod (Social Security num- ber 124-80-9050) and Mary (Social Security number 489-37-6676) Booth, who live in their own home. Ken and Amy live at 2345 Wilson Avenue, Menomonie, WI, 54751, and their Social Security numbers are 343-75-3456 (Ken) and 123-45-7890 (Amy). Required: Complete the Booths' federal income tax return for 2018 on Form 1040, Schedule 1, Schedule C, Schedule D, and Form 8949. A statement is required to be attached to a return for a nonbusiness bad debt, but this requirement may be ignored for this problem. Assume no 1099-B is filed in association with the bad debt when filling out Form 8949. 24. Russell (hirthdate February 2, 1967) and Linda Cirthdate August 30, 1972) Long have brought you the following information regarding their income and expenses for the current year. Russell owns and operates a landscaping business called Lawns and Landscapes Unlimited. The business is operated out of their home, located at 1244 Cherry Lane, Nampa, ID 83687. The principal business code is 561730. Russell's book keeper provided the following income statent from the landscaping business: Sei Casandalety Shon TOTAL OPERATING EXPENS NET INCOME NOSS (1,176.00 The bookkeeper provided the following additional information: Donations expense is a $600 donation to the Campaign to Re-Elect Senator Ami Dahla. Training includes $575 for an educational seminar on bug control. It also in- cludes the cost for Russell to attend an online certificate program in landscaping in order to improve his skills and advertise his designation as a certified land scaper. The tuition fees, and books cost $1,400. He also drove his personal car 57 miles round trip to Boise to take excams three times for a total of 171 miles. No business gift exceeded $22 in value. The business uses the cash method of accounting and has no accounts receivable or inventory held for resale. In addition to the above expenses, the Longs have set aside one room of their house as a home office. The room is 200 square feet and their house has a total of 1,600 square feet. They pay $12,600 per year rental on their house, and the utilities amount to $3,000 for the year. Interest from Idaho Bank and Trust bond portfolio $42,810 The Longs have two dependent children, Bill (Social Security number 123-23-7654) and Martha (Social Security number 345-67-8654). Both Bill and Martha are full-time high school students, ages 17 and 18, respectively. Russell's Social Security number is 664-98-5678 and Linda's is 554-98-3946. They made an estimated tax payment to the IRS of $2,500 on December 31, 2018 Required: Complete the longs' federal tax return for 2018 on Form 1040, Schedule 1, Schedule 5. Schedule Schedule and Form 8829. Do not complete Form 4542 (depreciation)