Peter and Jenny Veracruz are married and file a joint return. Peter is self-employed as a dentist, and Jenny is a college professor. The Veracruzs live at 606 Forest Avenue, Cincinnati, OH 45211. Peters birthday is 3/5/1967 and his Social Security is 459-85-1256. Jennys birthday is 4/24/1970 and her Social Security is 145-61-7854.

Peter practices under the name Peter Veracruz, DDS. His business is located at 485 North Avenue, Cincinnati, OH 45211, and his employer identification number is 01-4578456. Peters gross receipts during the year were $111,000. Peter uses the cash method of accounting for his business. Peters business expenses were are follows:

Advertising	$1,200
Professional dues	490
Professional journals	360
Contributions to employee benefit plans	2,000
Malpractice insurance	3,200
Fine for overbilling State of Ohio for work performed on welfare patient	5,000
Insurance on office contents	720
Interest on money borrowed to refurbish office	600
Accounting services	2,100
Miscellaneous office expense	388
Office rent	12,000
Dental supplies	7,672
Utilities and telephone	3,360
Wages	30,000
Payroll taxes	2,400

In June, Peter decided to refurbish his office. This project was completed and the assets placed into service on July 1. Peters expenditures included $8,000 for new office furniture (seven-year recovery period), $6,000 for new dental equipment (seven-year recovery period), and $2,000 for a new computer (five-year recovery period). Peter elected to compute his cost recovery allowance using MACRS. He did not elect to use 179 immediate expensing and he chose not to claim any bonus depreciation.

Complete Peters Schedule C and Form 4562. (The only forms you need to complete for this assignment is Schedule C and Form 4562.)