Fact Pattern: Amber is 27 years old and is single. She makes stained glass windows and art. She earned $225,000 from self-employment in 2022. In addition to her self-employment earnings, she contributed the maximum amount to her SEP IRA for 2022. Amber also had $8,000 of rental income. She is selling many assets to purchase a vacation property in Kawai, Hawaii. In 2019 she received a small inheritance of $60,000 and decided to invest it. Amber purchased gold bracelets through Craig's List posting in 2019 for $4,000. She later learned that the bracelets were from the Persian Empire period and, because of their historical significance, were worth $82,000. She sold the bracelets in November of 2022. Amber purchased a leveraged oil futures ETF in March 2020 for $10,000 when oil prices collapsed. After Russia invaded Ukraine, Amber sold the leveraged oil ETF for $186,000 in August of 2022. During the time that Amber held the oil ETF she had earnings distributions of $22,000 that she had recognized taxes on. In 2019 she also purchased a rental property (Property New) for $150,000. She paid $30,000 down and borrowed $120,000. She claimed $14,500 in MACRS depreciation on the residential rental property. She is considering exchanging the rental property, worth $280,000. Amber contacts a qualified intermediary and sells her property, does not take possession of the money, and directs the intermediary to purchase a replacement vacation rental property in Kawai, Hawaii within 180 days. The property in Kawai has a fair market value (cost) of $428,000. Assume that all conditions are met to qualify for a like-kind exchange. The exchange will occur in 2022. In 2019 Amber purchased a painting for $12,000 at an art show for emerging artists. That artist became very renowned, and that early painting is now worth $148,000. To make up the difference in between the value of her rental property and the new property Amber also sells the painting and applies all proceeds to the purchase of the new property. The qualified exchange meets the requirements of Section 1031. Amber received a different rental property (Property Old) as part of her inheritance in 2019. The rental property was purchased in 2002 for $220,000. The deceased owner had taken MACRS depreciation on the residential rental property of $108,000 before their death. When Amber inherited the rental property it was worth $580,000. Amber chose to make that rental property her primary residence. Amber is moving to the North Georgia mountains and sold the property in September of 2022 for $982,000. The new mountain home that she purchased was $1,200,000.

Using this information, please calculate Ambers tax liability for the year. Also, consider the following question and respond to it. If Amber had a rental loss of $8,000 instead of rental income of $8,000, how would this rental loss be handled? You dont need to recalculate the tax liability; explain how it would be handled. Deliverable: Form 1040, with Schedule 1 ,2, and 3 and all other necessary schedules. Please be mindful of the various tax rates that apply and how those rates should be calculated. Any other forms and schedules can also be included and may be helpful but are not required. Had Amber contacted you before making these transactions, what advice would you have given her? Please write one to two paragraphs about what you would have advised her to do differently. Finally, please remember this tax return is worth 120 points, twice the normal amount of points.