Julio and Maria Gomez are retired, over $66$ years old, and they live at $567$ Ono Way, Cambria, CA $94457.$ Julio's Social Security number is $777-88-5555$ and Maria's is $666-88-4444.$

Julio received Social Security retirement benefits of $$28,400$ and Maria received Social Security retirement benefits of $$22,858.$ In addition, Maria received

a pension form the state of California in the amount of $$16,752,$ and she had $$3500$ withheld for federal taxes $($ include this on page $2$ of Form $1040$ as a

credit towards the tax liability$).$ Julio and Maria also have a savings account with Wells Fargo Bank and they earned $$4200$ in interest income.

Julio and Maria own and live in their own home but do not pay a mortgage because they have paid it completely prior to retiring. Their property taxes are

very low and their medical expenses as well so they do not itemize deductions.

Julio and Maria have a rental and need to include the income on their tax returns. They received $$36000$ in rents and had the following expenses for their rental which is located in Cambria, CA$.$

Property taxes $$3400$

Utilities $$1200$

Repairs $$5478$

Depreciation $$1234.$

Prepare their $2022$ tax return. Include Forms $1040$SR$,$ Schedule $1,$ and Schedules B and E$.$ Only part of their Social Security retirement benefits are taxable. Provide the calculations you made to determine how much of their Social Security retirement benefits are taxable.