Form $1040$

Schedule $1$ of $($Form $1040)$

Schedule $2$ of $($Form $1040$

Schedule C of $($Form $1040)$

Schedule D of Form $1040)$

Form $8949$

Schedule SE $($Form $1040)$

Form $4797$

Schedule $8812$

Form $8995$

Form $8960$

Form $4562*$ Use the following information to complete Phillip and Claire Dunphy$$s $2022$ federal income tax return. If any information is missing, use reasonable assumptions to fill in the gaps.

$*$ The forms, schedules, and instructions can be found at the IRS website $($www$.$irs.gov$).$ The instructions can be helpful in completing the forms.

Facts:

$1.$ Phillip and Claire are married and file a joint return. Phillip is self$-$employed as a real estate agent, and Claire is a flight attendant. Phillip and Claire have three dependent children. All three children live at home with Phillip and Claire for the entire year.

The Dunphys provide you with the following additional information:

$*$ The Dunphys do not want to contribute to the presidential election campaign.

$*$ The Dunphys live at $3701$ Brighton Avenue, Los Angeles, California $90018.$

$*$ Phillip$$s birthday is $11/5/1976$ and his Social Security number is $321-11-5766.$

$*$ Claire$$s birthday is $5/12/1979$ and her Social Security number is $567-11-1258.$

$*$ Haley$$s birthday is $11/6/2010$ and her Social Security number is $621-11-7592.$

$*$ Alex$$s birthday is $2/1/2012$ and her Social Security number is $621-11-8754.$

$*$ Luke$$s birthday is $12/12/2016$ and his Social Security number is $621-11-9926.$

$*$ The Dunphys do not have any foreign bank accounts or trusts.

$1.$ Claire is a flight attendant for Western American Airlines $($WAA$),$ where she earned $$57,000$ in salary. WAA withheld federal income tax of $$6,375,$ state income tax of $$1,800,$ Los Angeles city income tax of $$675,$ Social Security tax of $$3,600,$ and Medicare tax of $$825.$

$2.$ Phillip and Claire received $$300$ of interest from State Savings Bank on a joint account. They also received a qualified dividend of $$395$ on jointly owned stock in Xila Corporation.

$3.$ Phillip$$s full$-$time real estate business is named $$Phillip Dunphy Realty.$$ His business is located at $645$ Grove Street, Los Angeles, California $90018,$ and his employer identification number is $93-3488888.$ Phillip$$s gross receipts during the year were $$730,000.$ Phillip uses the cash method of accounting for his business. Phillip$$s business expenses are as follows:

Advertising $ $5,000$ Professional dues $800$ Professional journals $200$ Employee wages $48,000$ Insurance on office contents $1,120$ Accounting services $2,100$ Miscellaneous office expense $500$ Utilities and telephone $3,360$ Payroll taxes $3,600$ DepreciationTo be calculated

$1.$ On March $20,2022$ Phillip moved his business out of the old offices at $1103$ Allium Lane into a newly constructed and equipped office on Grove Street. Phillip sold the old office building and all its furnishings. Phillip$$s expenditures for the new office building are as follows:

Date Acquired$$Asset$$Cost$3/20/2022$Land$ $300,0003/20/2022$Office building $2,500,0003/20/2022$Furniture $200,0004/1/2022$Computer system $350,0006/1/2022$Artwork $150,000$

$1.$ Phillip computes his cost recovery allowance using MACRS. He would like to use the $179$ immediate expensing, but he has elected to not claim any bonus depreciation. Phillip has never claimed $179$ or bonus depreciation before. The assets Phillip sold on March $20$ are as follows:

Date AcquiredAssetSales PriceOriginal CostAccumulated Depreciation as of Beginning of the Year$5/1/16$Office building$$940,000$$$900,000$$$129,8255/1/16$Land $150,000100,00007/1/16$Furniture $50,000239,000206,9988/13/18$Furniture $10,000324,000222,7824/12/19$Office equipment$100,000120,00067,5245/13/21$Computers $30,00050,00010,000$

$1.$ Phillip has never sold any assets relating to his business before this transaction.

$2.$ Phillip and Claire donated $$350$ to the Salvation Army during $2022.$

$3.$ The Dunphys sold $60$ shares of Fizbo Corporation common stock on September $3$ for $$65$ a share $($minus a $$50$ total commission$).$ The Dunphys purchased the stock on November $8,2021,$ for $$90$ a share. They also sold a painting for $$13,000$ on March $1.$ Claire purchased the painting for $$20,050$ on September $1,2014,$ as an investment.

$4.$ The Dunphys filed their $2021$ federal, state, and local returns on April $13,2022.$ They paid the following additional $2021$ taxes with their returns: federal income taxes of $$630,$ state income taxes of $$250,$ and city income taxes of $$75.$

$5.$ The Dunphys made timely estimated federal income tax payments of $$10,000$ each quarter during $2022.$ They also made estimated state income tax payments of $$1,000$ each quarter and estimated city income tax payments of $$300$ each quarter. The Dunphys made all fourth$-$quarter payments on December $31,2022.$ They would like to receive a refund for any overpayments.

$6.$ The Dunphys did not buy, sell, exchange, or otherwise acquire any financial interest in a virtual currency.