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I need help filling out a 1040 for this problem: James and Kate Sawyer were married on New Years Eve of 2015. Before their marriage,

I need help filling out a 1040 for this problem:

James and Kate Sawyer were married on New Years Eve of 2015. Before their marriage, Kate lived in New York and worked as a hair stylist for one of the citys top salons. James lives in Atlanta where he works for a public accounting firm earning an annual salary of $100,000. After their marriage, Kate left her job in New York and moved into the couples newly purchased 3,200-square-foot home in Atlanta. Kate incurred $2,200 of qualified moving expenses. The couple purchased the home on January 3, 2016, by paying $100,000 down and obtaining a $240,000 mortgage for the remainder. The interest rate on this loan was 7 percent and the Sawyers made interest-only payments on the loan through June 30, 2016 (assume they paid exactly one-half of a years worth of interest on this loan by June 30). On July 1, 2016, because the value of their home had increased to $400,000, the Sawyers were in need of cash, and interest rates had dropped, the Sawyers refinanced their home loan. On the refinancing, they borrowed $370,000 at 6 percent interest. They made interest-only payments on the home loan through the end of the year and they spent $20,000 of the loan proceeds improving their home (assume they paid exactly one-half of a years worth of interest on this loan by year end). Kate wanted to try her hand at making it on her own in business, and with Jamess help, she started Kates Beauty Cuts LLC. She set up shop in a 384-square-foot corner room of the couples home and began to get it ready for business. The room conveniently had a door to the outside providing customers direct access to the shop. Kate paid $2,100 to have the carpet replaced with a tile floor. She also paid $1,200 to have the room painted with vibrant colors, and $650 to have the room rewired for appropriate lighting. Kate ran an ad in the local newspaper and officially opened her shop on January 24, 2016. By the end of the year, Kates Beauty Cuts LLC generated $40,000 of net income before considering the home office deduction. The Sawyers incurred the following home-related expenditures during 2016:

$4,200 of real property taxes.

$2,000 for homeowners insurance.

$2,400 for electricity.

$1,500 for gas and other utilities.

They determined depreciation expense for their entire house was $8,364. Also, on March 2, Kate was able to finally sell her one-bedroom Manhattan condominium for $478,000. She purchased the condo, which she had lived in for six years prior to her marriage, for $205,000. Kate owns a vacation home in Myrtle Beach, South Carolina. She purchased the home several years ago, largely as an investment opportunity. To help cover the expenses of maintaining the home, James and Kate decided to rent the home out. They rented the home for a total of 106 days at fair market value (this included eight days that they rented the home to Jamess brother Jack). In addition to the 106 days, Kate allowed a good friend and customer, Clair, to stay in the home for half-price for two days. James and Kate stayed in the home for six days for a romantic getaway and another three days in order to do some repair and maintenance work on the home. The rental revenues from the home in 2016 were $18,400. The Sawyers incurred the following expenses associated with the home:

$9,100 of interest expense.

$3,400 of real property taxes.

$1,900 for homeowners insurance.

$1,200 for electricity.

$1,600 for gas, other utilities, and landscaping.

$5,200 for depreciation.

I can do all the math and figure that out, but I am having trouble figuring out where they go on the 1040 form and the schedules and forms to go with the 1040. Can anyone help me with this?

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