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Kelly and Chanelle Chambers, ages 47 and 45, are married and live at 584 Thoreau Drive. Boston, MA 59483. Kelly's Social Security number is 111-11-1111 and Chanclle's is 222-22-2222 The Chambers have two children: Emma, age 23, and Chet, age 19. Their Social Security numbers are 333-33-3333 and 444-44-4444, respectively. Emma is a single college student and earmed $8,000 during the summer. Kelly and Chanelle help Emma through school by paying for her room, board, and tuition. Emma lives at home during the summer. Chet has a physical handicap and lives at home. He attends a local university and earned $4,000 working for a marketing firm. In sum, Kelly and Chanelle provide more than 50% of both Emma 's and Chct's total support for the ycar. Kelly is a commercial pilot for a small airline. His salary is $95,000, from which S19,000 of federal income tax and S8,000 of stare income tax were withheld. Kelly also pays premiums for health, disability, and life insurance. $2,000 of the premiumn was for health insurance. $2.50 for disability, and $400 for life insurance. Chanelle c ork consulting. liance Networks, a proprietorship hat does ner During the year, Chanelle's gross revenues were S23,000. She incurred the following ex- penses in her business: S 700 5,400 150 1,200 1,300 800 Liability insurance Software rental Journals and magazines Training seminars Supplies Donations to a political campaign fund Kelly enjoys playing guitar and plays in a band. Kelly's band has developed a local fol- lowing. This year, his gross revenues were $1,200 for playing shows and S700 on CD sales. He incurred the following expenses: Cpars Studio rent expense Sound system repairs $1,300 200 S00 800 CD production New guitar and amplifier Kelly's father passed away during the year. Kelly and Chanelle received $100,000 from the life insurance policy. Neither Kelly nor Chanelle paid any of the premiums Chanelle urchased 100 shares of Thurston Co. stock on May 1, 1991, for $1.000. Thurston Co. was declared bankrupt during the current vear Cher's physician recommended that he see a physsical therapist to help with his disabiE iry. Kelly paid the therapist $7,000 during the year because his insurance would nor cover the bills. Kelx and Chanelle went to Las Vegas and won $5,000 at the blackjack table. The next night, they lost $6,000. Kelly and Chanclle gave 5900 ta ing other income and expenses: their church and, during the year, they had the follow $1,400 500 9,000 Real estare taxes Property taxes on car (determined by value) Home mortgage interest Credit cand financeeharges Tax return preparation fees (S600 is allocable to Chanclle's business) Sales tax on Interest from a savings account Interest from City of Boston Bonds Dividend from 3M stock 09 1,000 6,200 800 700 400 in 2 purchases during the year Prepare Kelly and Chanelle's tax return Form 1040 and Schedules A, B, C, D, and SE for the current year A/B/C/Se/D/8 e7-00 Kelly and Chanelle Chambers, ages 47 and 45, are married and live at 584 Thoreau Drive. Boston, MA 59483. Kelly's Social Security number is 111-11-1111 and Chanclle's is 222-22-2222 The Chambers have two children: Emma, age 23, and Chet, age 19. Their Social Security numbers are 333-33-3333 and 444-44-4444, respectively. Emma is a single college student and earmed $8,000 during the summer. Kelly and Chanelle help Emma through school by paying for her room, board, and tuition. Emma lives at home during the summer. Chet has a physical handicap and lives at home. He attends a local university and earned $4,000 working for a marketing firm. In sum, Kelly and Chanelle provide more than 50% of both Emma 's and Chct's total support for the ycar. Kelly is a commercial pilot for a small airline. His salary is $95,000, from which S19,000 of federal income tax and S8,000 of stare income tax were withheld. Kelly also pays premiums for health, disability, and life insurance. $2,000 of the premiumn was for health insurance. $2.50 for disability, and $400 for life insurance. Chanelle c ork consulting. liance Networks, a proprietorship hat does ner During the year, Chanelle's gross revenues were S23,000. She incurred the following ex- penses in her business: S 700 5,400 150 1,200 1,300 800 Liability insurance Software rental Journals and magazines Training seminars Supplies Donations to a political campaign fund Kelly enjoys playing guitar and plays in a band. Kelly's band has developed a local fol- lowing. This year, his gross revenues were $1,200 for playing shows and S700 on CD sales. He incurred the following expenses: Cpars Studio rent expense Sound system repairs $1,300 200 S00 800 CD production New guitar and amplifier Kelly's father passed away during the year. Kelly and Chanelle received $100,000 from the life insurance policy. Neither Kelly nor Chanelle paid any of the premiums Chanelle urchased 100 shares of Thurston Co. stock on May 1, 1991, for $1.000. Thurston Co. was declared bankrupt during the current vear Cher's physician recommended that he see a physsical therapist to help with his disabiE iry. Kelly paid the therapist $7,000 during the year because his insurance would nor cover the bills. Kelx and Chanelle went to Las Vegas and won $5,000 at the blackjack table. The next night, they lost $6,000. Kelly and Chanclle gave 5900 ta ing other income and expenses: their church and, during the year, they had the follow $1,400 500 9,000 Real estare taxes Property taxes on car (determined by value) Home mortgage interest Credit cand financeeharges Tax return preparation fees (S600 is allocable to Chanclle's business) Sales tax on Interest from a savings account Interest from City of Boston Bonds Dividend from 3M stock 09 1,000 6,200 800 700 400 in 2 purchases during the year Prepare Kelly and Chanelle's tax return Form 1040 and Schedules A, B, C, D, and SE for the current year A/B/C/Se/D/8 e7-00