Russell (birthdate February 2, 1968) and Linda (birthdate August 30, 1973) Long have brought you the following information regarding their income and expenses for the current year. Russell owns and operates a landscaping business called Lawns and Landscapes Unlimited (EIN: 32-1456789). The business is operated out of their home, located at 1234 Cherry Lane, Nampa, ID 83687. The principal business code is 561730. Russells bookkeeper provided the following income statement from the landscaping business:

The bookkeeper provided the following additional information:

• Donations expense is a $600 donation to the Campaign to Re-Elect Senator Ami Dahla.

• Training includes $575 for an educational seminar on bug control. It also includes the cost for Russell to attend an online certificate program in landscaping in order to improve his skills and advertise his designation as a certified landscaper. The tuition, fees, and books cost $1,400. He also drove his personal car 57 miles round trip to Boise to take exams three times for a total of 171 miles.

• No business gift exceeded $22 in value.

• The subscription is for a trade magazine titled Plants Unlimited.

The business uses the cash method of accounting and has no accounts receivable or inventory held for resale.

In addition to the above expenses, the Longs have set aside one room of their house as a home office. The room is 160 square feet and their house has a total of 1,600 square feet. They pay $13,200 per year rental on their house, and the utilities amount to $1,800 for the year.

The Longs also have the following interest income for the year:

Interest from Idaho Bank and Trust bond portfolio

$44,000

The Longs have two dependent children, Bill (Social Security number 123-23-7654) and Martha (Social Security number 345-67-8654). Both Bill and Martha are full-time high school students, ages 17 and 18, respectively, and each can be claimed for the $500 other dependent credit. Russells Social Security number is 664-98-5678 and Lindas is 554-98-3946. They made an estimated tax payment to the IRS of $2,500 on December 31, 2019.

Required: Complete the Longs federal tax return for 2019 on Form 1040, Schedule 1, Schedule 3, Schedule B, Schedule C, and Form 8829. Do not complete Form 4562 (depreciation).

Lawns and Landscapes Income Statement 12/31/2019 Current Period 1/1/2019 to 12/31/2019 Prior Period 1/1/2018 to 12/31/2018 $ $ REVENUES Lawn maintenance Lawn and plant installation Other TOTAL REVENUES 82,300.00 34,600.00 17,100.00 134,000.00 71,998.00 48,576.00 8,001.00 128,575.00 COST OF SERVICES Salaries Payroll Taxes Equipment Rental Maintenance (Equipment) Special Clothing and Safety Shoes Contract Labor TOTAL COST OF SERVICES 83,400.00 6,700.00 12,600.00 8,300.00 660.00 7,780.00 119,440.00 78,445.00 6,432.00 10,651.00 8,435.00 200.00 6,790.00 110,953.00 GROSS PROFIT (LOSS) 14,560.00 17,622.00 OPERATING EXPENSES Advertising and Promotion Donations Insurance Meals and Entertainment Subscriptions Business Gifts Telephone Training Travel Other TOTAL OPERATING EXPENSES 1,500.00 600.00 4,000.00 2,300.00 120.00 790.00 2,015.00 1,975.00 865.00 1,700.00 15,865.00 700.00 500.00 870.00 2,100.00 120.00 600.00 1,956.00 750.00 2,724.00 10,320.00 NET INCOME (LOSS) $ (1,305.00) $ 7,302.00 Lawns and Landscapes Income Statement 12/31/2019 Current Period 1/1/2019 to 12/31/2019 Prior Period 1/1/2018 to 12/31/2018 $ $ REVENUES Lawn maintenance Lawn and plant installation Other TOTAL REVENUES 82,300.00 34,600.00 17,100.00 134,000.00 71,998.00 48,576.00 8,001.00 128,575.00 COST OF SERVICES Salaries Payroll Taxes Equipment Rental Maintenance (Equipment) Special Clothing and Safety Shoes Contract Labor TOTAL COST OF SERVICES 83,400.00 6,700.00 12,600.00 8,300.00 660.00 7,780.00 119,440.00 78,445.00 6,432.00 10,651.00 8,435.00 200.00 6,790.00 110,953.00 GROSS PROFIT (LOSS) 14,560.00 17,622.00 OPERATING EXPENSES Advertising and Promotion Donations Insurance Meals and Entertainment Subscriptions Business Gifts Telephone Training Travel Other TOTAL OPERATING EXPENSES 1,500.00 600.00 4,000.00 2,300.00 120.00 790.00 2,015.00 1,975.00 865.00 1,700.00 15,865.00 700.00 500.00 870.00 2,100.00 120.00 600.00 1,956.00 750.00 2,724.00 10,320.00 NET INCOME (LOSS) $ (1,305.00) $ 7,302.00