Aage and Michelle are married and have two dependent children, Gitte and Markus. Gitte is 18 and is currently in college (full time) at Oregon State University. Markus is 15. Aage works as a systems administrator for the government while Michelle runs a craft business from their home (but no part of the home is used exclusively for the craft business). Michelles craft business consists of making craft items for sale at craft shows that are held periodically at various locations. Michelle spends considerable time and effort on her craft business, and it has been consistently profitable over the years. Aage and Michelle own a home and pay interest on their home loan (balance of $220,000) and a personal loan to pay for Gittes college expenses (balance of $35,000).

Neither Aage nor Michelle are blind or over age 65, and they plan to file as married-joint. Based on the numbers above and below, complete Form 1040, Schedule A, Schedule C, Schedule D, Form 4562, and any other required schedules for 2021.

Income:

Aages salary $ 109,255 Michelles craft sales 18,600 Interest from certificate of deposit 1,650 Interest from Treasury bonds 727 Interest from municipal bonds 920 Sold shares of SGI on 5/15/2021 for $240, shares were purchased on 3/20/2012 for $700 Sold shares of HP on 7/15/2021 for $940, shares were purchased on 3/20/2021 for $800

Expenditures: Federal income tax withheld from Aages wages $ 18,700 State income tax withheld from Aages wages 6,850 Assume the correct amount of SS tax was withheld Real estate taxes on residence 6,200 Automobile licenses (based on weight) on personal (not business) autos 310 State sales tax paid for personal (not business) purchases 1,150 Home mortgage interest 14,000 Interest on personal credit card 2,300 Medical expenses (unreimbursed) 1,690 Aages employee expenses (unreimbursed) 2,400 Cost of Michelles craft supplies 4,260 Postage for mailing crafts 145 Travel and lodging for craft shows 2,230 Meals during craft shows 670 College tuition paid for Gitte 6,780 Interest on loans to pay Gittes tuition 3,200 Gittes room and board at college 12,620 Cash contributions to Red Cross 525

Michelle's business has a number of assets. During 2020, she bought the following assets:

2020 Assets	Purchase Date	Basis
Computer (5-year)	October 30	$1,000
Office equipment (7-year)	October 30	$10,000
Furniture (7-year)	October 30	$13,000

In April of 2021 she decided to purchase a customer list from a company started by someone else. The customer list cost $10,000 and the sale was completed on May 1. In the summer she purchased a small van (for transportation, only used in the business).

2021 Assets	Purchase Date	Basis
Van	June 15	$11,000
Customer List	May 1	$10,000

Assume that she does not claim any 179 expense or bonus depreciation. Assume she otherwise takes the maximum allowable deductions for depreciation in 2020 and 2021.