• Christopher Crosphit (birthdate April 28, 1979) 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 and the EIN is 12-3456789. Chris had the following income and expenses from the health club:

  Income		$216,000
  Expenses:
  	Business insurance	3,500
  	Office supplies	3,330
  	Payroll	98,900
  	Payroll taxes	9,112
  	Travel	2,450
  	Equipment & club maintenance	10,750
  	Cleaning service	8,775
  	Equipment rent	22,800
  	Utilities (electric, water, gas)	13,975
  	Telephone	2,780
  	Rent	32,800
  	Advertising	5,150
  	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 money market account	$13,000
  Morgan Bank bond portfolio interest	12,500

  Chris also dabbles as a broker of antique and rare books. He acquires and scavenges for books and then sells them on the Internet. He generated $4,000 of sales in 2021 and the books he sold cost $3,500. He also incurred $7,600 in travel and other expenses related to this activity. Chris has never turned a profit in the book business, but he loves books and book selling and does not mind losing money doing it.

  Chris has been a widower for 10 years with a dependent son, Arnold (Social Security number 276-23-3954), and Chris files his tax return as head of household. Arnold (birthdate July 1, 2003) is a high school student; he does not qualify for the child tax credit but does qualify for the $500 other dependent 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 $500 on April 15, 2021. Chris received a $2,800 EIP in 2021.

  Required: Complete Chris federal tax return for 2021 on Form 1040, Schedule 1, Schedule B, Schedule C, and Form 8829. Do not complete Form 4562 (depreciation).

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