Question 1 Please note how the gain on the building goes from Part III of Form 4797, to Schedule D, to Line 7 of the Form 1040. As such, the gain is taxed as a long-term capital gain. Is this correct? Explain.

Question 2 Please note how the gain on the appliances goes from Part III of Form 4797, to Line 4 of Schedule 1, to Line 8 of the Form 1040. As such, the gain is taxed as ordinary income. Is this correct? Explain.

Question 3 The rentals are assumed to qualify as QBI due to the fact that the owner;s activities constitute a trade or business. Does the amount of the QBI deduction (Line 13 of the form 1040) appear to be correct. Explain.

Question 4 I think my fee for completing this return, including interviewing the client, preparing the return, reviewing the return for accuracy, and delivering the return would be how much? The preparation of the return may take only 60 - 90 minutes using the software. Realize that is your lifeblood and that you have significant training and expertise and quite an investment in tax preparation software.

1040-SR Department of the Treasury - Internal Revenue Service (99) U.S. Tax Return for Seniors At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency? Yes X No Standard Someone can claim: You as a dependent Your spouse as a dependent Deduction Spouse itemizes on a separate return or you were a dual-status alien 1 Wages, salaries, tips, etc. Attach Form(s) W-2 b Taxable interest b Ordinary dividends b Taxable amount b Taxable amount b Taxable amount 7 Capital gain or (loss). Attach Schedule D if required. If not required, check here 8 Other income from Schedule 1, line 10 9 Add lines 1,2b,3b,4b,5b,6b,7, and 8 . This is your total income 10 Adjustments to income from Schedule 1, line 26 \begin{tabular}{|c|r} \hline 1 & 17,000 \\ \hline 2b & 1,450 \\ \hline 3b & 1,155 \\ \hline 4b & 0 \\ \hline 5b & 0 \\ \hline 6b & \\ \hline \end{tabular} 11 Subtract line 10 from line 9 . This is your adjusted gross income \begin{tabular}{|rr} 7 & 47,798 \\ \hline 8 & 24,483 \\ \hline 9 & 91,886 \\ \hline 10 & 0 \\ \hline 11 & 91,886 \\ \hline \multicolumn{2}{c}{ Form 1040SR(2021)} \end{tabular} KIA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040-SR (2021) Page 2 Form 1040-SR (2021) Page 3 \begin{tabular}{lll} Third Party \\ Designee & Do you want to allow another person to discuss this retum with the IRS? See instructions Designee's name & ..... \\ \hline \end{tabular} Sign Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of Here of which preparer has any knowledge. 1 Taxable refunds, credits, or offsets of state and local income taxes 2a Alimony received b Date of original divorce or separation agreement (see instructions) 3 Business income or (loss). Attach Schedule C 4 Other gains or (losses). Attach Form 4797 5 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 6 Farm income or (loss). Attach Schedule F 7 Unemployment compensation 8 Other income: a Net operating loss b Gambling income c Cancellation of debt d Foreign earned income exclusion from Form 2555 e Taxable Health Savings Account distribution f Alaska Permanent Fund dividends g Jury duty pay h Prizes and awards i Activity not engaged in for profit income j Stock options k Income from the rental of personal property if you engaged in the rental for profit but were not in the business of renting such property 1 Olympic and Paralympic medals and USOC prize money (see instructions) m Section 951(a) inclusion (see instructions) n Section 951A(a) inclusion (see instructions) - Section 461(i) excess business loss adjustment p Taxable distributions from an ABLE account (see instructions) z Other income. List type and amount 9 Total other income. Add lines 8a through 8z 10 Combine lines 1 through 7 and 9 . Enter here and on Form 1040, 1040-SR, or \begin{tabular}{|c|c} \hline 1 & 0 \\ \hline 2a & \\ \hline 3 & 0 \\ \hline 4 & 2,500 \\ \hline 5 & 21,983 \\ \hline 6 & 0 \\ \hline 7 & \\ \hline \end{tabular} Schedule 1 (Form 1040) 2021 Page 2 Part II Adjustments to Income 11 Educator expenses 12 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 13 Health savings account deduction. Attach Form 8889 14 Moving expenses for members of the Armed Forces. Attach Form 3903 15 Deductible part of self-employment tax. Attach Schedule SE 16 Self-employed SEP, SIMPLE, and qualified plans 17 Self-employed health insurance deduction 18 Penalty on early withdrawal of savings 19a Alimony paid b Recipient's SSN c Date of original divorce or separation agreement (see instructions) 20 IRA deduction 21 Student loan interest deduction 22 Reserved for future use 23 Archer MSA deduction \begin{tabular}{|l|l} \hline 11 & \\ \hline 12 & 0 \\ \hline 13 & 0 \\ \hline 14 & 0 \\ \hline 15 & 0 \\ \hline 16 & 0 \\ \hline 17 & 0 \\ \hline 18 & \\ \hline 19a & \\ \hline \end{tabular} 24 Other adjustments: a Jury duty pay (see instructions) b Deductible expenses related to income reported on line 8k from the rental of personal property engaged in for profit c Nontaxable amount of the value of Olympic and Paralympic medals and USOC prize money reported on line 81 d Reforestation amortization and expenses - Repayment of supplemental unemployment benefits under the f Contributions to section 501(c)(18)(D) pension plans g Contributions by certain chaplains to section 403(b) plans h Attorney fees and court costs for actions involving certain unlawful discrimination claims (see instructions) i Attorney fees and court costs you paid in connection with an award from the IRS for information you provided that helped the IRS detect tax law violations j Housing deduction from Form 2555 k Excess deductions of section 67(e) expenses from Schedule K-1 (Form 1041) z Other adjustments. List type and amount 25 Total other adjustments. Add lines 24 a through 24z 26 Add lines 11 through 23 and 25. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 10, or Form 1040-NR, line 10a 24z KIA 26 \begin{tabular}{l} 0 \\ \hline \end{tabular} If "Yes," attach Form 8949 and see its instructions for additional requirements for reporting your gain or loss. Part II Long-Term Capital Gains and Losses-Generally Assets Held More Than One Year (see instructions) 11 Gain from Form 4797, Part l; long-term gain from Forms 2439 and 6252; and long-term gain or (loss) from Forms 4684,6781 , and 8824 12 Net long-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 13 Capital gain distributions. See the instructions 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Carryover Worksheet in the instructions 15 Net long-term capital gain or (loss). Combine lines 8 a through 14 in column (h). Then go to Part III on page 2 KIA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule D (Form 1040) 2021 -Thelossonline16;or-($3,000),orifmarriedfilingseparately,($1,500)} Note: When figuring which amount is smaller, treat both amounts as positive numbers. 22 Do you have qualified dividends on Form 1040, 1040-SR, or 1040-NR, line 3a? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 16. No. Complete the rest of Form 1040, 1040-SR, or 1040-NR. Form 8949 (2021) Altachment Sequence No. 12A Page 2 Before you check Box D, E, or F below, see whether you received any Form(s) 1099-B or substitute statement(s) from your broker, A substitute statement will have the same information as Form 1099-B. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check. Part II Long-Term. Transactions involving capital assets you held more than 1 year are generally long-term (see instructions). For short-term transactions, see page 1. Note: You may aggregate all long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the totals directly on Schedule D, line 8 ; you aren't required to report these transactions on Form 8949 (see instructions). You must check Box D, E, or F below. Check only one box. If more than one box applies for your long-term transactions, complete a separate Form 8949, page 2, for each applicable box. If you have more long-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. X (D) Long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) (E) Long-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (F) Long-term transactions not reported to you on Form 1099-B Part I Income or Loss From Rental Real Estate and Royalties Note: If you are in the business of renting personal property, use Schedule C. See instructions. If you are an individual, report farm rental income or loss from Form 4835 on page 2, line 40. A Did you make any payments in 2021 that would require you to file Form(s) 1099 ? See instructions B If "Yes," did you or will you file required Forms 1099? YesYesXNoNo 1a Physical address of each property (street, city, state, ZIP code) \begin{tabular}{l|lll} \hline A & 2222 & Slum Place National City WA 98945 \\ \hline B & 2525 & Share Lane National City WA 98989 \\ \hline \end{tabular} c Type of Property: 1 Single Family Residence 3 Vacation/Short-Term Rental 5 Land 7 Self-Rental 2 Multi-Family Residence 4 Commercial 6 Royalties 8 Other (describe) 7 Cleaning and maintenance 8 Commissions 9 Insurance 10 Legal and other professional fees 11 Management fees 12 Mortgage interest paid to banks, etc. (see instructions) 13 Other interest 14 Repairs 15 Supplies 16 Taxes 17 Utilities 18 Depreciation expense or depletion 19 Other (list) 20 Total expenses. Add lines 5 through 19 21 Subtract line 20 from line 3 (rents) and/or 4 (royalties). If result is a (loss), see instructions to find out if you must file Form 6198 22 Deductible rental real estate loss after limitation, if any, on Form 8582 (see instructions) 23a Total of all amounts reported on line 3 for all rental properties b Total of all amounts reported on line 4 for all royalty properties c Total of all amounts reported on line 12 for all properties d Total of all amounts reported on line 18 for all properties e Total of all amounts reported on line 20 for all properties 24 Income. Add positive amounts shown on line 21. Do not include any losses 25 Losses. Add royalty losses from line 21 and rental real estate losses from line 22 . Enter total losses here. 26 Total rental real estate and royalty income or (loss). Combine lines 24 and 25 . Enter the result here. If Parts II, III, IV, and line 40 on page 2 do not apply to you, also enter this amount on Schedule 1 (Form 1040), line 5. Otherwise, include this amount in the total on line 41 Part I Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions From Other Than Casualty or Theft - Most Property Held More Than 1 Year (see instructions) 10 Ordinary gains and losses not included on lines 11 through 16 (include property held 1 year or less); 11 Loss, if any, from line 7 12 Gain, if any, from line 7 or amount from line 8 , if applicable 13 Gain, if any, from line 31 14 Net gain or (loss) from Form 4684, lines 31 and 38a 15 Ordinary gain from installment sales from Form 6252, line 25 or 36 16 Ordinary gain or (loss) from like-kind exchanges from Form 8824 17 Combine lines 10 through 16 18 For all except individual retums, enter the amount from line 17 on the appropriate line of your return and skip lines a and b below. For individual returns, complete lines a and b below. a If the loss on line 11 includes a loss from Form 4684, line 35, column (b)(i), enter that pert of the loss here. Enter the loss from income-producing property on Schedule A( Form 1040), line 16. (Do not include any loss on property used as an employee.) ldentify as from "Form 4797, line 18a." See instructions b Redetermine the gain of (loss) on line 17 excluding the loss, if any, on line 18 . Enter here and on Schedule 1 (Form 1040), Part I, Ine 4 \begin{tabular}{|c|r} \hline 11 & ( \\ \hline 12 & \\ \hline 13 & 2,500 \\ \hline 14 & 0 \\ \hline 15 & 0 \\ \hline 16 & 0 \\ \hline 17 & 2,500 \\ \hline \\ \hline 18a & \\ \hline & \\ \hline 18b & 2,500 \\ \hline \multicolumn{2}{|c|}{ Form 4797(2021)} \\ \hline \end{tabular} Note. You can claim the qualified business income deduction only if you have qualified business income from a qualified trade or business, real estate investment trust dividends, publicly traded partnership income, or a domestic production activities deduction passed through from an agricultural or horticultural cooperative. See instructions. Use this form if your taxable income, before your qualified business income deduction, is at or below $164,900 ( $164,925 if married filing separately; $329,800 if married filing jointly), and you aren't a patron of an agricultural or horticultural cooperative. \begin{tabular}{c|c|c|c} \hline 1 & (a) Trade, business, or aggregation name & (b) Taxpayer identification number & (c) Qualified business income or (loss) \\ \hline i & 2222 Slum Place Nation & 469989898 & 13,865 \\ \hline ii & 2525 Share Lane Nation & 469989898 & 8,118 \\ \hline iii & & & \\ \hline iv & & & \\ \hline v & & & \\ \hline \end{tabular} 2 Total qualified business income or (loss). Combine lines 1i through 1v, 3 Qualified business net (loss) carryforward from the prior year 4 Total qualified business income. Combine lines 2 and 3 . If zero or less, enter 0 - 5 Qualified business income component. Multiply line 4 by 20%(0.20) 6 Qualified REIT dividends and publicly traded partnership (PTP) income or (loss) (see instructions) 7 Qualified REIT dividends and qualified PTP (loss) carryforward from the prior year 8 Total qualified REIT dividends and PTP income. Combine lines 6 and 7 . If zero or less, enter 0 - 9 REIT and PTP component. Multiply line 8 by 20%(0.20) 10 Qualified business income deduction before the income limitation. Add lines 5 and 9 11 Taxable income before qualified business income deduction (see instructions) 12 Net capital gain (see instructions) 13 Subtract line 12 from line 11. If zero or less, enter 0 - 14 Income limitation. Multiply line 13 by 20%(0.20) 15 Qualified business income deduction. Enter the smaller of line 10 or line 14 . Also enter this amount on the applicable line of your return (see instructions) 16 Total qualified business (loss) carryforward. Combine lines 2 and 3 . If greater than zero, enter 0 17 Total qualified REIT dividends and PTP (loss) carryforward. Combine lines 6 and 7 . If greater than zero, enter 0 - KIA For Privacy Act and Paperwork Reduction Act Notice, see instructions. Form 8995(2021) Rental Real Estate Activities With Active Participation (For the definition of active participation, see Special Allowance for Rental Real Estate Activities in the instructions.) If line 3 is a loss and: - Line 1d is a loss, go to Part II. - Line 2d is a loss (and line 1d is zero or more), skip Part II and go to line 10. Caution: If your filing status is married filing separately and you lived with your spouse at any time during the year, do not complete Part II. Instead, go to line 10. Part III Total Losses Allowed 10 Add the income, if any, on lines 1a and 2a and enter the total 11 Total losses allowed from all passive activities for 2021. Add lines 9 and 10 . See instructions to find out how to report the losses on your tax return Part IV Complete This Part Before Part I, Lines 1a, 1b, and 1c. See instructions. Form 8582 (2021) Page 2 Assignment nsactions for rX. Any not