Facts:

Sam (age 38) and Lara (age 40) Chen are married and file a joint tax return. Sam is preparing the tax return. They reside at 35 Magazine St, Cambridge, MA 02139 (phone number 617-353-1234), with their 10- and 7-year-old children, Emma and Oliver. Their Social Security numbers are: Sam 987-65-4321 Lara 123-45-6789 Emma 789-12-3456 Oliver 456-78-9012

Sam is a human resources officer for the biotech company Biostrata. His wages are $155,000, of which $25,000 is withheld from his W-2 (i.e., paid) to the IRS and $8,250 is withheld (i.e., paid) the Commonwealth of Massachusetts Department of Revenue. Lara has been a self-employed freelance writer for many years (business code 711510). She has the following income and expenses for the current year (cash basis):

Gross income from clients $55,000 (she does not need to file a Form 1099) Advertising $ 1,000 Legal and professional services $ 2,600 Car expenses calculate Insurance $ 1,000 Office expense $ 2,000 Repairs $ 500 Office rent $ 8,500 (at 3 Sudbury Dr., Boston, MA 02115) Lara uses the standard mileage rate method. She drove her car a total of 1,000 miles for business during the year and maintained proper written documentation. She drove a total of 4,000 miles for business and pleasure during the year. She placed her auto into service on 6/30/21. The vehicle is available during off-duty hours and another vehicle is available for personal use. (Note: Use the July-Dec mileage rate of 62.5 cents/mile). Lara also hosted other writers at a local restaurant several times, incurring a total of $3,000 in meals and $4,500 in entertainment. She discussed business at each of the meals and entertainment events and they were not extravagant. She obtained separate receipts for the meals and the entertainment. Assume Laras business does not qualify for the Qualified Business Income (QBI) deduction. Also, Lara does not use the farm or nonfarm optional methods to figure net earnings (i.e., ignore Part II of Schedule SE). Because she has self-employment income only, she does not have any W-2 wages. Ignore Form 8919.

During the year, the Chens sold the following stock investments* (dates are MM/DD/YY):

Stock	Date of Purchase	Date of Sale	Cost	Sale Proceeds
100 shares of Isabel, Inc.	06/15/17	10/06/22	$10,000	$8,000
1,000 shares of Harvey Corp.	03/05/22	12/03/22	$12,500	$10,000
500 shares of DePrisco Corp.	09/25/16	12/20/22	$2,000	$6,500
150 shares of Fiorella Corp.	02/07/22	08/15/22	$5,500	$3,500
200 shares of Lockheart, Inc.	11/02/17	04/02/22	$4,500	$7,500

*Also fill out Form 8949; fill out by checking Boxes A and D; do not fill out columns (f) or (g).

The Chens own a multi-unit apartment building at 52 Forbes St, Boston, MA 02130. The property was not used for personal purposes and had the following income and expenses:

Gross rental income $ 80,000 (They do not need to file a Form 1099) Total cash inflow $ 80,000

Advertising $ 2,000 Legal fees $ 500 Insurance $ 11,000 Interest payments on mortgage $ 12,500 Principal payments on mortgage $ 20,000 Supplies $ 2,500 Repairs $ 3,500 Real Property Taxes $ 11,000 Utilities $ 7,500 Total cash outflow $ 70,500 Assume the building has already been fully depreciated. The Chens earned the following interest during the year related to the following: U.S. Treasury bonds (not EE or I) $ 2,000 City of Brookline bonds $ 4,000 Boston Bank Savings Account $ 6,000 There were no foreign bank accounts or trusts. Do not attach Form 8815.

The Chens earned the following qualified dividends during the year related to the following: Isabel, Inc. $1,500 DePrisco Corp. $1,000 The Chens did not trade any virtual currency in the current year.

Other expenses incurred by the Chens are as follows (before any floors/ceilings): Medical expenses $ 20,000 Charitable contributions in cash $ 5,000 (ignore instructions) Mortgage interest on home $ 25,000 (all qualifying interest) Real Estate Taxes on home $ 9,000 Sams unreimbursed employee expenses $ 4,000 During the year, Lara Chen made estimated tax payments of $8,000 to the IRS related to her self-employment business income.

Other:

If the tax return calculation yields a refund in Line 35a of Page 2 of the Form 1040, the Routing Number is 123789011 (Savings) and Account number is 6174561111. If the result yields a payment in Line 37, do not calculate an estimated tax penalty or fill out Form 1040-V.

Ignore tax credits, including the Child Tax Credit and Earned Income Tax Credit, as well as the Qualified Business Income (QBI) Deduction.

You do not need to prepare the Commonwealth of Massachusetts state tax return.

Remember that Sam and Lara must sign and date the tax return!

Round all numbersboth intermediate and finalto whole dollars (including itemized deductions, self-employment tax, the Total Tax, etc.).

Mission: File Tax Return for Chens. Including Form 1040, Schedule 1, Schedule 2, Schedule A, B, C, D, E, SE(part 1 only), and Form 8949.