Christian G. and Carolina B. are married and live at 431 Yucca Drive, Santa Fe, NM 87650. Christian works for the convention bureau of the local Chamber of Commerce, and Carolina owns her own business. They file a joint return.

Personal items:

Wages/Salaries $105,000 (Includes both Christian and Carolina)

Interest Income 1,100

Child support payments to Zayden Gonzales 8,000

Alimony payments to Zayden Gonzales 7,200

Lottery Winnings 870

Federal income tax withholding 13,000

State income tax withheld 4,500

Carolina was previously married to Zayden Gonzales they divorced several years ago (prior to 2018). Under the divorce decree, Carolina was obligated to pay alimony to Zayden . She paid him $7,200 throughout the year, which agreed with the divorce decree.

Carolina is the owner of her own business. Throughout the year she earned $20,000 of taxable income from this business (taxed as an S-Corp).

Additionally, Christian and Carolina had:

(1)Sale of GTF publically trade stock on 2/15/2021 for $4,000(originally purchased for $8000 on 8/15/2020)

(2)Sale of MFT publically traded stock on 10/15/2021 for $17,000(originally purchased for $7000 on 12/15/2019)

(3)Sale of a yacht on 5/15/2021 for $10000 used for personal recreation(originally purchased for $20,000 on 6/15/2016)

(4)Carolina inherited publically traded stock worth $30,000 from a deceased aunt on September 30, 2021

(5)Immediately after receiving this stock, Carolina sold it for $30,000. This stock was originally purchased by his aunt on January 15th, 2018 for $23,000

Prepare the 2021 federal income tax return for Christian and Carolina B.

(1) tax return:1040 & Schedule 1 (2) brief explanation for items on the return