Noah and Joan Arcs Tax Return

Noah and Joan Arc live with their family in Dayton, OH. Noahs Social Security number is 434-11-3311. Noah was born on February 22, 1987, and Joan was born on July 1, 1988. Both enjoy good health and eyesight. Noah owns and operates a pet store, and Joan is a firefighter for the city of Dayton.

The Arcs have two children, a son named Shem (Social Security number 598-01-2345), born on March 21, 2015, and a daughter named Nora (Social Security number 554-33-2411), born on December 3, 2018.

Joan and Noah brought a folder of tax documents located on Pages D-3 to D-5.

Noahs pet store is located at 1415 S. Patterson Blvd, Dayton, OH 45409. The name of the store is The Arc and its taxpayer identification number is 95-9876556. Since you handle Noahs bookkeeping, you have printed the income statement from your Quickbooks software, shown on Page D-5.

Details of The Arcs meals and entertainment:

Travel costs are business related and do not include meals. Miscellaneous expense is a $300 contribution to Re-elect Goldie Wilson, Mayor of Dayton.

Noah and Joan paid the following amounts during the year:

Noah has a long-term capital loss carryover from last year of $1,300.

Noah and Joan own a condo and use it as a rental property. The condo is located at 16 Oakwood Ave, Unit A, Dayton, OH 45409. Noah provides the management services for the rental including selection of tenants, maintenance, repairs, rent collection, and other services as needed. On average, Noah spends about two hours per week on the rental activity. The revenue and expenses for the year are as follows:

Rental income received	$16,200
Insurance	800
Interest expense	5,800
Property taxes	1,500
Miscellaneous expenses	500

Rental income includes $1,150 per month for two months under the previous lease (which ended February 28, 2022). The new lease is $1,300 per month for ten months under the new lease but the tenant paid only $900 in May 2022 because the tenant paid $400 for repairs to the apartment, and with the Arcs permission, reduced Mays rent by $400. The new lease also required the tenant to pay last months $1,300 rent in February 2022. The home was acquired for $85,000 in 2006. On May 12, 2022, the Arcs installed new fixtures (7-year recovery period) at a cost of $3,500. They wish to maximize the cost recovery on the new fixtures but make no elections.

The Arcs paid Ohio general sales tax of $1,076 during the year.

Required: You are to prepare the Arcs federal income tax return in good form, signing the return as the preparer. Do not complete an Ohio state income tax return. Make realistic assumptions about any missing data that you may need. The following forms and schedules are required:

Form 1040	Schedule E
Schedule 1	Schedule SE
Schedule 2	Form 2441
Schedule 3	Form 4562
Schedule A	Schedule 8812
Schedule B	Form 8995
Schedule C	Qualified Dividends and Capital Gain Tax Worksheet
Schedule D