All facts remain the same as in Practice Set #1. In addition to the facts in Practice Set #1, Mary has now started a business. She has named her business Mary's Crafts - Made to Order. It is a SMLLC. Additionally, Eric wants to take an exotic vacation. He has heard wonderful things about climbing Mount Everest. To fund the trip he decides to sell stock that has been previously gifted to him. The general details for Eric, Mary and the children remain the same as in Practice Set #1. To complete this Practice Set #2, please add to your Practice Set #1 tax return the following activity: - See excel schedule for activity from Mary's Crafts - Made to Order. Please review the income and expenses and other details and include the activity in the Amoth's return. - To fund the Amoth's vacation this year they have chosen to sell several gifts that they have received through the years. The first of these was 100 shares of Dupont stock they had received as a gift in January 2005. Uncle Billy had a basis in the stock of $70,000. At the time of the gift the FMV of the stock was $100,000. Eric sells the stock for $100,000 on 11/1/20. - Eric also sold for $90,000 on 6/1/2020 the 100 shares of Apple stock that Uncle Billy gave him in 2017. The FMV at the time of the gift was $100,000 and Uncle Billy's basis was $120,000. - The last stock was 50 shares of Dollar Tree. Eric decided to sell it on 7/27/21 for $115,000 Uncle Billy gave him for Christmas 2016 . Ironically, Uncle Billy's basis in these shares was $120,000 and FMV at the time of the gift was $100,000. Compute the Amoth's net federal tax payable (or refund due) for 2021 . The 1040 and applicable other forms that would be needed to file a tax return with the IRS in 2021. DO NOT PREPARE THE CALIFORNIA RETURN. In addition to the federal return for 2021 , you will need to prepare a narrative explaining all of the items in this problem and why the income items are taxable or nontaxable and why the deduction items in this problem are deductible or nondeductible. Returns without the narrative will not be graded. Mary's Crafts - Made to Order Summary of Activity For the year ended December 31, 2021 Businessstarted2/1/21SalesRevenueCostofGoodsSold(basedonPurchasesfortheyear)Salaryandwages-paidtoothersRentUtilitiesTelephoneAdvertisingContributionstoStateSenatesCampaignMealsEntertainmentAccountingandLegalFees-seenotesDR(CR)(850,000)475,000175,00045,00010,0006,7003,0005,00015,0002,50040,000 Note the accounting and legal fees includes: $10,000 related to the purchase of another craft business and $15,000 to look into a restaurant that was not successful. Remaining accounting and legal fees are for the organization and start up of the business. Mary knows Quickbooks and believes she does not need an accountant or bookkeeper day to day and Eric believes that Legal Zoom is all the attorney they will need now that everything is up and running. He believes that the lawyer overcharged him for the work that has been done so far