Self-Study Problem 3.1 Teri Kataoka is self-employed as a professional golf instructor. She uses the cash method of accounting and her Social Security number is 466-47-8833. Her principal business code is 812990. Teri's business is located at 1234 Pinecrest Dr., Kennesaw, GA 30152. During 2019, Teri had the following income and expenses: Fees from golf lessons Expenses: Car mileage (5,234 business miles) Business liability insurance Office expense Rent on office space City business license Travel expense Meals (deductible portion) Utilities $40,125 3,036 475 660 2,700 250 3,000 985 1,015 Teri bought her car on January 1, 2019. In addition to the business miles listed above, she commuted 1,200 miles and she drove 5,000 miles for nonbusiness purposes. Complete Schedule C for Teri showing her net income from self-employment. Make realistic assumptions about any missing data. Enter all amounts as positive numbers. SCHEDULE C Profit or Loss From Business SCHEDULE C (Form 1040 or 1040-SR) Department of the Treasury Internal Revenue Service (99) Name of proprietor Teri Kataoka Profit or Loss From Business (Sole Proprietorship) Go to www.irs.gov/ScheduleC for instructions and the latest information. Attach to Form 1040, 1040-SR, 1040-NR, or 1041; partnerships generally must file Form 1065. A Principal business or profession, including product or service (see instructions) Social security number (SSN) 466-47-8833 B Enter code from instructions 812990 OMB No. 1545-0074 2019 Attachment Sequence No. 09 Golf Instructor C Business name. If no separate business name, leave blank. D Employer ID number (EIN), (see instr.) E Business address (including suite or room no.) 1234 Pinecrest Drive City, town or post office, state, and ZIP code Kennesaw, GA 30152 F Accounting method: (1) Cash (2) Accrual (3) Other (specify) G Did you "materially participate" in the operation of this business during 2019? If "No," see instructions for limit on Yes No losses G Did you "materially participate in the operation of this business during 2019? If "No," see instructions for limit on losses H If you started or acquired this business during 2019, check here.. I Did you make any payments in 2019 that would require you to file Form(s) 1099? (see instructions).. J If "Yes," did you or will you file required Forms 10997.. Part I 1 Income Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the "Statutory employee" box on that form was checked. 1 2 Returns and allowances. 2 3 Subtract line 2 from line 1 3 4 Cost of goods sold (from line 42) 4 5 Gross profit. Subtract line 4 from line 3. 5 6 7 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions)... Gross income. Add lines 5 and 6 9 7 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising. 8 18 Office expense (see instructions).. 18 19 9 Car and truck expenses (see Pension and profit-sharing plans. 19 20 Rent or lease (see instructions): instructions). Yes No 0 a Yes No Yes No 9 Car and truck expenses (see 19 Pension and profit-sharing plans.... 19 instructions). 9 20 Rent or lease (see instructions): ..... 10 Commissions and fees....... 10 a Vehicles, machinery, and equipment 20 11 Contract labor (see instructions) 11 b Other business property 20b 12 Depletion..... 12 21 Repairs and maintenance 21 13 14 15 15 16a 16b 17 13 Depreciation and section 179 expense deduction (not included in Part III) (see instructions).. 14 Employee benefit programs (other than on line 19)...... 15 Insurance (other than health). 16 Interest (see instructions): ... a Mortgage (paid to banks, etc.). b Other..... 17 Legal and professional services 28 Total expenses before expenses for business use of home. Add lines 8 through 27a. 29 Tentative profit or (loss). Subtract line 28 from line 7. 22 Supplies (not included in Part III).. 22 23 Taxes and licenses 23 24 Travel and meals: a Travel, 24a b Deductible meals (see instructions) 24b 25 Utilities 25 26 Wages (less employment credits).... 26 27a Other expenses (from line 48)..... 27a b Reserved for future use.. 27b 28 29 ca for Tature 270 28 Total expenses before expenses for business use of home. Add lines 8 through 27a 29 Tentative profit or (loss). Subtract line 28 from line 7. 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: and (b) the part of your home used for business: in the instructions to figure the amount to enter on line 30 31 Net profit or (loss). Subtract line 30 from line 29. 22 Use the Simplified Method Worksheet 30 If a profit, enter on both Schedule 1 (Form 1040 or 1040-SR), line 3 (or Form 1040-NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. If a loss, you must go to line 32. 32 If you have a loss, check the box that describes your investment in this activity (see instructions). If you checked 32a, enter the loss on both Schedule 1 (Form 1040 or 1040-SR), line 3, (or Form 1040-NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 Instructions). Estates and trusts, enter on Form 1041, line 3. . If you checked 32b, you must attach Form 6198. Your loss may be limited. For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P } 31 32a All investment is at risk. 32b Some investment is not at risk. Schedule C (Form 1040 or 1040-SR) 2019 29 Tentative profit or (loss). Subtract line 28 from line 7. 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: and (b) the part of your home used for business:, in the instructions to figure the amount to enter on line 30. 31 Net profit or (loss). Subtract line 30 from line 29. 29 20 Use the Simplified Method Worksheet 30 If a profit, enter on both Schedule 1 (Form 1040 or 1040-SR), line 3 (or Form 1040-NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. If a loss, you must go to line 32. 32 If you have a loss, check the box that describes your investment in this activity (see instructions). If you checked 32a, enter the loss on both Schedule 1 (Form 1040 or 1040-SR), line 3, (or Form 1040-NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on Form 1041, line 3. If you checked 32b, you must attach Form 6198. Your loss may be limited. } 10 31 32a All investment is at risk. 32b Some investment is not at risk. For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P Schedule C (Form 1040 or 1040-SR) 2019 Schedule C (Form 1040 or 1040-SR) 2019 Part III Cost of Goods Sold (see instructions) 33 Method(s) used to value closing inventory: Cost b Lower of cost or market co Other (attach explanation) Page 2 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes," attach explanation. 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation. 36 Purchases less cost of items withdrawn for personal use.. 37 Cost of labor. Do not include any amounts paid to yourself. 38 Materials and supplies. 39 Other costs. 40 Add lines 35 through 39. 41 Inventory at end of year 42 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4 Part IV Yes No 35 36 37 38 39 40 41 42 Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for this business. See the instructions for line 13 to find out if you must file Form 4562. 43 When did you place your vehicle in service for business purposes? (month, day, year) 44 Of the total number of miles you drove your vehicle during 2019, enter the number of miles you used your vehicle for: a Business b Commuting (see instructions) 45 Was your vehicle available for personal use during off-duty hours?. 46 Do c. Other Yes No app store univer of miles you used your vehicle for: a Business b Commuting (see instructions) c Other 45 Was your vehicle available for personal use during off-duty hours? 46 Do you (or your spouse) have another vehicle available for personal use?. Yes No Yes No 47a Do you have evidence to support your deduction? b If "Yes," is the evidence written?.... Part V Other Expenses. List below business expenses not included on lines 8-26 or line 30. Yes No a Yes No : 48 Total other expenses.Enter here and on line 27a 48 Schedule C (Form 1040 or 1040-SR) 2019