Kelly and Channelle Chambers, ages 47 and 45, are married and live at 584 Thoreau Drive, Boston, MA 59483. Kelly's Social Security number is 111-11-111 and Chanelle's is 222-22-222. The Chambers have two children: Emma, age 23, and Chet, age 19. Their Social Security numbers are 333-33-333 and 444-44-444, respectively. Emma is a single college student and earned $8,000 during the summer. Kelly and Chanelle help Emma through school by paying for her room, board, and tuiton. Emma lives at home during the summer. Chet has a physical handicap and lives at home. He attends a local university and earned $4,000 working for a marketing firm. In sum, Kelly and Channelle provide more than 50% of both Emma's and Chet's total support for the year. Kelly is a commerical pilot for a small airline. His salary is $95,000, from which $19,000 of federal income tax and $8,000 of state income tax were withheld. Kelly also pays premiums for health, disability, and life insurance. $2,000 of the premium was for health insurance, $250 for disability, and $400 for life insurance. Chanelle owns Alliance Networks, a proprietorship that does network consulting. During the year, Chanelle's gross revenues were $23,000. She incurred the following expenses in her business.

Liability insurance 700

Software rental 5400

Journals and magazines 150

Training seminars 1200

Supplies 1300

Donations to political campaign 800

Kelly enjoys playing guitar and plays in a band. Kelly's band has developed a local following. This year, his gross revenues were $1,200 for playing shows and $700 on CD sales. He incurred the following expenses:

Studio rent expense 1300

Sound system repairs 200

CD production 500

New guitar and amplifier 800

Kellys father passes away during the year. Kelly and Chanelle received $100,000 from the life insurance policy. Neither Kelly nor Chanelle paid any of the premiums. Chanelle purchased 100 shars of Thurston CO. stock on May 1, 1991 for $1,000. Chets physician recommended that he see a physical therapist to help with his disability. Kelly paid the therapist $7,000 during the year because his insurance would not cover the bills. Kelly and Chanelle went to Las Vegas and won $5,000 at the blackhack table. The next night, they lost $6,000. Kelly and Chanelle gave $900 to their church and, during the year, they had the following other income and expenses:

Real estate taxes 1400

Property taxes on car (determined by value) 500

Home mortgage interest 9000

Credit card finance charges 2600

Tax return preparation fees (600 is allocable to chanelles business) 1000

Sales tax on purchases during the year 6200

Interest from savings account 800

Interest from City of Boston Bonds 700

Dividend from 3M stock 400

Prepare Kelly and Chanelles tax return from Form 1040 and Schedules A,B,C,D and SE, for the current year.