John and Ellen Brite (SSN 000-00-1111 and 000-00-2222, respectively) are married and file a joint return. They have no dependents. John owns an unincorporated specialty electrical lighting retail store. Brite-On. Rrite On had the following assets on January 1, 2014: Brite-On purchased a competitor's store on March 1, 2014, for $107,000. The purchase price included the following: On June 30, 2014, Brite-On sold the 7-year recovery period equipment for $12,000. Brite-On leased a $30,500 car for $500/Vmonth beginning on January 1, 2014. The car is used 100% for business and was driven 14,000 miles during the year. Brite On sold 8,000 light bulbs at a price of $15/bulb during the year. Also. Brite-On made additional purchases of 4,000 light bulbs in August 2014 at a cost of $7/bulb. Brite-On had the following revenues (in addition to the sales of light bulbs) and additional expenses: The Brites received interest income on a bank savings account of $275. John and Ellen made four S5,000 quarterly estimated tax payments. For self employment tax pur poses, assume John spent 100% of his time at the store while Ellen spends no time at the store. Additional Facts: Equipment acquired in 2009: The Brites elected out of bonus depreciation and did not elect Sec. 179. Equipment acquired in 2014: The Brites elected Sec. 179 to expense the cost of the 5-year equipment but elected out of bonus depreciation. Assume that the lease inclusion rules require that Brite-On reduce its deductible lease expense by $8. Compute the Brite's taxable income and balance due or refund for 2014. Using the facts in Problem 1:10-48 for John and Ellen Brie, complete their 2014 Form | 1040, Schedules A, C, and SF., and Forms 4562 and 4797. John and Ellen Brite (SSN 000-00-1111 and 000-00-2222, respectively) are married and file a joint return. They have no dependents. John owns an unincorporated specialty electrical lighting retail store. Brite-On. Rrite On had the following assets on January 1, 2014: Brite-On purchased a competitor's store on March 1, 2014, for $107,000. The purchase price included the following: On June 30, 2014, Brite-On sold the 7-year recovery period equipment for $12,000. Brite-On leased a $30,500 car for $500/Vmonth beginning on January 1, 2014. The car is used 100% for business and was driven 14,000 miles during the year. Brite On sold 8,000 light bulbs at a price of $15/bulb during the year. Also. Brite-On made additional purchases of 4,000 light bulbs in August 2014 at a cost of $7/bulb. Brite-On had the following revenues (in addition to the sales of light bulbs) and additional expenses: The Brites received interest income on a bank savings account of $275. John and Ellen made four S5,000 quarterly estimated tax payments. For self employment tax pur poses, assume John spent 100% of his time at the store while Ellen spends no time at the store. Additional Facts: Equipment acquired in 2009: The Brites elected out of bonus depreciation and did not elect Sec. 179. Equipment acquired in 2014: The Brites elected Sec. 179 to expense the cost of the 5-year equipment but elected out of bonus depreciation. Assume that the lease inclusion rules require that Brite-On reduce its deductible lease expense by $8. Compute the Brite's taxable income and balance due or refund for 2014. Using the facts in Problem 1:10-48 for John and Ellen Brie, complete their 2014 Form | 1040, Schedules A, C, and SF., and Forms 4562 and 4797
