Client: Vera ( \& Jack) Hamilton - Lakeside Oasis Gifts Schedule: Property, plant and equipment Date: December 31, 2021 Additional notes: [1] No Section 179 election or bonus depreciation on assets purchased before 2021 [2] Maximize deduction for 2021 asset addition. [3] "Shelving" asset was sold on October 30,2021. 4562 Depreclation and Amortization (Including Information on Listed Property) Department of the Treasury intemal Revenve Senvo (99) Attach to your tax return. Nama(s) shown on retum Part 1 Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. 1 Maximum amount (see instructions). 2 Total cost of section 179 property placed in service (see instructions) 3 Threshold cost of section 179 property before reduction in limitation (see instructions) 4 Reduction in limitation. Subtract line 3 from line 2 . If zero or less, enter 0 - 5 Dollar limitation for tax year. Subtract line 4 from line 1 . If zero or less, enter 0-. If married filing separately, see instructions 6 (a) Description of property 7 Listed property. Enter the amount from line 29 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 9 Tentative deduction. Enter the smaller of line 5 or line 8 10 Carryover of disallowed deduction from line 13 of your 2020 Form 4562 . 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 . See instructions 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11 13 Carryover of disallowed deduction to 2022. Add lines 9 and 10 , less line 12 \begin{tabular}{|l|l} \hline 1 & \\ \hline 2 & \\ \hline 3 & \\ \hline 4 & \\ \hline & \\ \hline 5 & \\ \hline \\ \hline \end{tabular} Note: Don't use Part II or Part III below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year. See instructions. 15 Property subject to section 168(f)(1) election 16 Other depreciation (including ACPS) \begin{tabular}{|l|l} \hline 14 & \\ \hline 15 \\ \hline 16 \\ \hline \end{tabular} 16 Other depreciation (including ACRS) Part III MACRS Depreciation (Don't include listed property. See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2021 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here Section B -Assets Placed in Service During 2021 Tax Year Using the General Depreciation System Section C-Assets Placed in Service During 2021 Tax Year Using the Alternative Depreciation System \begin{tabular}{c|l} \hline 20a Class life & \\ \hline b 12-year & \\ \hline c 30 -year & \\ \hline d 40 -year \\ \hline Part IV Summary (See instructions.) \\ \hline \end{tabular} 21 Listed property. Enter amount from line 28 22 Total. Add amounts from line 12, lines 14 through 17 , lines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporations - see instructions 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs . For Paperwork Reduction Act Notice, see separate instructions. Form 4562 (2021) Part V Listed Property (Include automobiles, certain other vehicles, certain aircraft, and property used for entertainment, recreation, or amusement.) Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24 a, 24b, columns (a) through (c) of Section A, all of Section B, and Section C if applicable. 26 Property used more than 50% in a qualified business use: 27 Property used 50% or less in a qualified business use: to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. 32 Total other personal (noncommuting) miles driven 33 Total miles driven during the year. Add lines 30 through 32 34 Was the vehicle available for personal use during off-duty hours? 35 Was the vehicle used primarily by a more than 5% owner or related person? 36 Is another vehicle available for personal use? CLIENT TAX INFORMATION: "Lucky" Jack Hamilton comes to your office and asks you to prepare his 2021 federal income tax return. He provides you with the following information: Jack (SS\# 111-00-9999) and Vera (SS\# 111-99-8888) Hamilton are married and file a joint income tax return. Their address is 91000 Granny White Pike, Nashville, TN, 37204. Jack is employed as a tour guide, and Vera operates a small, unincorporated shop selling lake souvenirs and supplies "Lakeside Oasis Gifts" (EIN 59-8884567, Business Identification Code 453220). She rents a small business space at 123 Mallard Parkway, Nashville, TN 37204. 1. Jack and Vera have a nine year-old son, Chance (SS\# 111-99-2222), and they provide 100% of his support. Chance attends Samson Public Elementary School. 2. Jack's 2021W2 received from his employer is included in the tax information he gives to you. He also included additional tax forms he received. The following documents are available on Canvas/Projects/Project 1/Additional Client Info.pdf: - Jack's W-2 - 1099-INT from NSB Savings Bank - 1099-INT from State of TN Water District (municipal bonds) - 1099-DIV from South Corporation (a C-Corporation) stock 3. Vera's business generated gross receipts of $199,600 in 2021. During 2021, she wrote checks for $128,460 related to her business. Vera uses the cash method of accounting and she keeps a separate bank account for her business. An Excel spreadsheet containing a detailed list of Vera's expenditures (and a template for computing tax depreciation) is avallable on Canvas/Projects/Project 1/Project. 1 Business info and Tax Depreciation.pdf. 4. Vera began her Lakeside Oasis Gifts business in 2018 and purchased several assets during that year. She did not elect Section 179 expensing (and she elected out of bonus depreciation) at that time because her business was just beginning (with little cash inflow) and her accountant advised her that it would be better to stretch out the deductions over the depreciable lives of the assets. The assets are used 100% for business and have been depreciated using MACRS. The assets are listed on the tax depreciation schedule on Canvas/Projects/Project 1/Project 1 Business Info and Tax Depreciation.pdf. 5. In July 2021, Vera purchased display cases for Lakeside Oasis Gifts for $15,000. She paid $1,500 down and financed the balance. She has been making payments of $620/ month since July 2021. Of the total payments made during 2021,$340 was for interest. 6. Additional business-related information: - Vera received $500 on October 30,2021 , from the sale of old shelving, which was purchased in March 2018. Client: Vera ( \& Jack) Hamilton - Lakeside Oasis Gifts Schedule: Property, plant and equipment Date: December 31, 2021 Additional notes: [1] No Section 179 election or bonus depreciation on assets purchased before 2021 [2] Maximize deduction for 2021 asset addition. [3] "Shelving" asset was sold on October 30,2021. 4562 Depreclation and Amortization (Including Information on Listed Property) Department of the Treasury intemal Revenve Senvo (99) Attach to your tax return. Nama(s) shown on retum Part 1 Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. 1 Maximum amount (see instructions). 2 Total cost of section 179 property placed in service (see instructions) 3 Threshold cost of section 179 property before reduction in limitation (see instructions) 4 Reduction in limitation. Subtract line 3 from line 2 . If zero or less, enter 0 - 5 Dollar limitation for tax year. Subtract line 4 from line 1 . If zero or less, enter 0-. If married filing separately, see instructions 6 (a) Description of property 7 Listed property. Enter the amount from line 29 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 9 Tentative deduction. Enter the smaller of line 5 or line 8 10 Carryover of disallowed deduction from line 13 of your 2020 Form 4562 . 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 . See instructions 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11 13 Carryover of disallowed deduction to 2022. Add lines 9 and 10 , less line 12 \begin{tabular}{|l|l} \hline 1 & \\ \hline 2 & \\ \hline 3 & \\ \hline 4 & \\ \hline & \\ \hline 5 & \\ \hline \\ \hline \end{tabular} Note: Don't use Part II or Part III below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year. See instructions. 15 Property subject to section 168(f)(1) election 16 Other depreciation (including ACPS) \begin{tabular}{|l|l} \hline 14 & \\ \hline 15 \\ \hline 16 \\ \hline \end{tabular} 16 Other depreciation (including ACRS) Part III MACRS Depreciation (Don't include listed property. See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2021 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here Section B -Assets Placed in Service During 2021 Tax Year Using the General Depreciation System Section C-Assets Placed in Service During 2021 Tax Year Using the Alternative Depreciation System \begin{tabular}{c|l} \hline 20a Class life & \\ \hline b 12-year & \\ \hline c 30 -year & \\ \hline d 40 -year \\ \hline Part IV Summary (See instructions.) \\ \hline \end{tabular} 21 Listed property. Enter amount from line 28 22 Total. Add amounts from line 12, lines 14 through 17 , lines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporations - see instructions 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs . For Paperwork Reduction Act Notice, see separate instructions. Form 4562 (2021) Part V Listed Property (Include automobiles, certain other vehicles, certain aircraft, and property used for entertainment, recreation, or amusement.) Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24 a, 24b, columns (a) through (c) of Section A, all of Section B, and Section C if applicable. 26 Property used more than 50% in a qualified business use: 27 Property used 50% or less in a qualified business use: to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. 32 Total other personal (noncommuting) miles driven 33 Total miles driven during the year. Add lines 30 through 32 34 Was the vehicle available for personal use during off-duty hours? 35 Was the vehicle used primarily by a more than 5% owner or related person? 36 Is another vehicle available for personal use? CLIENT TAX INFORMATION: "Lucky" Jack Hamilton comes to your office and asks you to prepare his 2021 federal income tax return. He provides you with the following information: Jack (SS\# 111-00-9999) and Vera (SS\# 111-99-8888) Hamilton are married and file a joint income tax return. Their address is 91000 Granny White Pike, Nashville, TN, 37204. Jack is employed as a tour guide, and Vera operates a small, unincorporated shop selling lake souvenirs and supplies "Lakeside Oasis Gifts" (EIN 59-8884567, Business Identification Code 453220). She rents a small business space at 123 Mallard Parkway, Nashville, TN 37204. 1. Jack and Vera have a nine year-old son, Chance (SS\# 111-99-2222), and they provide 100% of his support. Chance attends Samson Public Elementary School. 2. Jack's 2021W2 received from his employer is included in the tax information he gives to you. He also included additional tax forms he received. The following documents are available on Canvas/Projects/Project 1/Additional Client Info.pdf: - Jack's W-2 - 1099-INT from NSB Savings Bank - 1099-INT from State of TN Water District (municipal bonds) - 1099-DIV from South Corporation (a C-Corporation) stock 3. Vera's business generated gross receipts of $199,600 in 2021. During 2021, she wrote checks for $128,460 related to her business. Vera uses the cash method of accounting and she keeps a separate bank account for her business. An Excel spreadsheet containing a detailed list of Vera's expenditures (and a template for computing tax depreciation) is avallable on Canvas/Projects/Project 1/Project. 1 Business info and Tax Depreciation.pdf. 4. Vera began her Lakeside Oasis Gifts business in 2018 and purchased several assets during that year. She did not elect Section 179 expensing (and she elected out of bonus depreciation) at that time because her business was just beginning (with little cash inflow) and her accountant advised her that it would be better to stretch out the deductions over the depreciable lives of the assets. The assets are used 100% for business and have been depreciated using MACRS. The assets are listed on the tax depreciation schedule on Canvas/Projects/Project 1/Project 1 Business Info and Tax Depreciation.pdf. 5. In July 2021, Vera purchased display cases for Lakeside Oasis Gifts for $15,000. She paid $1,500 down and financed the balance. She has been making payments of $620/ month since July 2021. Of the total payments made during 2021,$340 was for interest. 6. Additional business-related information: - Vera received $500 on October 30,2021 , from the sale of old shelving, which was purchased in March 2018