Tax Return Assignment #2 You are a new staff accountant at the Kevin Malone CPA Group. Your boss, Kevin Malone, has given you the task of preparing a Form 4562 and Schedule C for Joseph Satte for the tax year 2018. Joseph Gatto owns an unincorporated technology accessory company called Larry's Gadgets. Joe has a new state of the art product called the USB Tire that he plans to roll out. The business address is 12345 Larry Road, New York, NY 10001. Joe's social security number is 111-11- 1111. Joe uses the Lower of Cost or Market (LCM) method to value his inventory. Do not enter any business code. Joe uses the cost method of accounting. For 2018, Joe reports the following items of income and expense: Sales $2,896,750 Cost of Goods Sold $723,400 Office expenses $11,300 Legal services related to lawsuits by customers against the business for the USB stick breaking off while driving $8,500 Legal services related to a personal lawsuit from Sal Vulcang for tattooing Sal without consent $127,000 Salary expenses paid to his only salesman, James Murray $53,700 Rent expense for business office $12,300 Utility expenses $16,000 Advertising expenses $27,500 Depreciation ?????? Information related to Larry's Gadgets depreciation is as follows: Cost of warehouse acquired and placed into service on August 1, 2018: $750,000 Cost of office furniture acquired and placed in service on April 15, 2018 (7-year recovery): $480,000 Depreciation on assets placed in service prior to 2018: $28,000 Please prepare Joe's Form 4562 and Schedule C. Joe elects to expense the maximum amount possible under Section 179 and bonus deprecation for any eligible amounts exceeding the Section 179 maximum. Use 2018 tax forms. You can find the 2018 tax forms on irs.gov. 4562 Depreciation and Amortization (Including Information on Listed Property) Attach to your tax return. Go to www.irs.gov/Form4562 for instructions and the latest information. Business or activity to which this form relates | OMB No. 1545-0172 2018 Attachment Department of the Treasury Internal Revenue fervia 1991 Names shown on return Sequence No. 179 Identifying number - Partl Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. 1 Maximum amount (see instructions) . . . . . . . . . . . . . . . . . . . . . . . 2 Total cost of section 179 property placed in service (see instructions) .. . .. . .. . .. 3 Threshold cost of section 179 property before reduction in limitation (see instructions) ... .. . 4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter-O-. . . . . . . . . . 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married filling separately. See instructions . . . . . . . . . . . . . . . . . . . . . . . 6 (al Description of property (b) Cost business use only) (c) Elected cost 2 3 14 5 id) Recovery business/investment use 7 Listed property. Enter the amount from line 29 . . . . . . 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 . .. . . . 8 9 Tentative deduction. Enter the smaller of line 5 or line 8.... .. .. . .. . .. . . 9 10 Carryover of disallowed deduction from line 13 of your 2017 Form 4562. ... . . . . . . . . 10 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5. See instructions. 11 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11 13 Carryover of disallowed deduction to 2019. Add lines 9 and 10, less line 12 1 3 Note: Don't use Part Il or Part Ill below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year. See instructions. . . . . . . . . . . . . . . . . . . . . . 15 Property subject to section 16810 (1) election . . . . . . . . . . . . . . . . . . . . 15 16 Other depreciation (including ACRS) .. . . . . . . . . . . . . . . 16 Part III MACRS Depreciation (Don't include listed property. See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2018 . . . . . . . 17 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here Section B-Assets Placed in Service During 2018 Tax Year Using the General Depreciation System b) Month and year of Basis for depreciation (a) Classification of property placed in service Method ) Depreciation deduction only period I only see instruction fel Convention see instructions perio 19a 3-year property b 5-vear property C 7-year property d 10-year property e 15-year property f 20-year property g 25-year property h Residential rental property i Nonresidential real property Section C-Assets Placed in Service During 2018 Tax Year Using the Alternative Depreciation System 20a Class life b 12-year c 30-year d 40-year Part IV Summary (See instructions.) 21 Listed property. Enter amount from line 28 .. . .. | 21 22 Total. Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporations-see instructions . 22 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs. . . . . . . 23 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 12906N Form 4562 (2018) Form 4562 (2018) Page 2 Part V Listed Property (Include automobiles, certain other vehicles, certain aircraft, and property used for entertainment, recreation, or amusement.) Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a, 24b, columns (a) through (c) of Section A, all of Section B, and Section C if applicable. Section A-Depreciation and Other Information (Caution: See the instructions for limits for passenger automobiles.) 24a Do you have evidence to support the business/investment use claimed? Yes No 24b If "Yes," is the evidence written? Yes No Depreciation deduction Elected section 179 Business id Basis for depreciation Recovery Method Type of property ist Date placed Investment ad Cost or other basis business/investment I period Convention vehicles first in service percentage use only) 25 Special depreciation allowance for qualified listed property placed in service during 25 the tax year and used more than 50% in a qualified business use. See instructions. 26 Property used more than 50% in a qualified business use: 90 90 % fel 27 Property used 50% or less in a qunlified business use: SIL- SIL- 96 S/L - 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1 . 28 29 Add amounts in column line 26. Enter here and on line 7. page 1 . . . . . . . . . . . 29 Section B-Information on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other "more than 5% owner, or related person. If you provided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. (c) (d) Vehicle Vehicle 3 30 Vehicle 2 Total business/investment miles driven during Vehicles Vehicle 4 Vehicles the year (don't include commuting miles). 31 Total commuting miles driven during the year 32 Total other personal (noncommuting) miles driven . . . . . . . . . 33 Total miles driven during the year. Add lines 30 through 32 . . . . . . . 34 Was the vehicle available for personal Yes No Yes No Yes No Yes No Yes No Yes No use during off-duty hours?..... 35 Was the vehicle used primarily by a more than 5% owner or related person?.. 36 is another vehicle available for personal use? TI Section C-Questions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who aren't more than 5% owners or related persons. See instructions. 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by Yes No your employees? . . . . . . 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See the instructions for vehicles used by corporate officers, directors, or 1% or more owners.. 39 Do you treat all use of vehicles by employees as personal use? . . . . . . . . . . . . . . . . 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the information received?. .. 41 Do you meet the requirements concerning qualified automobile demonstration use? See instructions..... Note: If your answer to 37, 38, 39, 40, or 41 is "Yes," don't complete Section B for the covered vehicles. Part VI Amortization by Date amortization fo Description of costs Amortizable amount Code section Amortization period or percentage Amortization for this year 42 Amortization of costs that begins during your 2018 tax year (see instructions): 43 Amortization of costs that began before your 2018 tax year. . 44 Total. Add amounts in column). See the instructions for where to report .. . .. .. 43 | 44 Form 4562 (2018) SCHEDULE C (Form 1040) Department of the Treasury Internal Revenue Service (99) Name or proprietor 2018 Profit or Loss From Business LOMB No. 1545-0074 (Sole Proprietorship) Go to www.irs.gov/Schedule for instructions and the latest information. Attachment Attach to Form 1010, 1040NR, or 1011; partnerships generally must file Form 1066. Sequence No. 09 Social security number (SSN) A Principal business or profession, including product or service (see instructions) B Enter code from instructions Business name. If no separate business name, leave blank. D Employer ID number (EIN) (seinstr.) J 2 3 Business address (including suite or room no.) City, town or post office, state, and ZIP code Accounting method: (1) Cash (2) Accrual (3) Other (specify) Did you "materially participate in the operation of this business during 2018? If "No," see instructions for limit on losses Yes No If you started or acquired this business during 2018, check here. . . Did you make any payments in 2018 that would require you to file Form(s) 10997 (see instructions) . . . . . Yes No f"Yes," did you or will you file required Forms 10997. , Yes No Part Income 1 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. 2 Retums and allowances. . . . . Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . 4 Cost of goods sold (from line 42) . . . . . . . . 5 Gross profit. Subtract line 4 from line 3. . . . . . . . . . . . . . . . . . 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 6 7 Gross income. Add lines 5 and 6... Part II Expenses. Enter expenses for business use of your home only on line 30. Advertising. . . . 18 Office expense (see instructions) 18 Car and truck expenses (see 19 Pension and profit-sharing plans 19 T instructions). . . . 20 Rent or lease (see instructions: 10 Commissions and fees , 10 a Vehicles, machinery, and equipment 200 11 Contract labor (see instructions) 11 b Other business property . 20b 12 Depletion . . . . . 12 21 Repairs and maintenance . . . 21 Depreciation and section 179 22 Supplies (not included in Part III) . 22 expense deduction (not 23 Taxes and licenses. . . 23 included in Part II) (see instructions). . 13 . . 24 Travel and meals: 14 Employee benefit programs a Travel . . . . . . . 24a (other than on line 19) . 114 b Deductible meals (see 15 Insurance (other than health) 15 instructions) . . . . . . 24b 16 Interest (see instructions): 25 Utilities . 26 a Mortgage (paid to banks, etc.) 16a 26 Wages (less employment credits). 26 b Other . . . . . . 16b 27a Other expenses (from line 48) 27a 17 Legal and professional services 17 b Reserved for future use... 27b 28 Total expenses before expenses for business use of home. Add lines through 27a . . . . 28 29 Tentative profit or loss). Subtract line 28 from line 7. . . . 29 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 L. Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30. . . . 31 Net profit or loss). Subtract line 30 from line 29 If a profit, enter on both Schedule 1 (Form 1040), line 12 for Form 1040NR, 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), line 12 (or Form 1040NR, 32a All investment is at risk. line 13) and on Schedule SE, line 2. of you checked the box on line 1, see the line 31 instructions) 326 Some investment is not Estates and trusts, enter on Form 1041, line 3. at risk If you checked 32b, you must attach Form 6196. Your loss may be limited For Paperwork Reduction Act Notice, see the separate instructions. Cal. No. 11334P Schedule Form 1010, 2018 Schedule C (Form 10401 2018 Part 11 Cost of Goods Sold (see instructions) 33 Method(s) used to value closing inventory: a Cost b Lower of cost or market c O ther (attach explanation) Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes, attach explanation . . . . . . . . . . . . . . . . . . Yes No Inventory at beginning of year. If different from last year's closing inventory, attach explanation.. | 35 | Purchases less cost of items withdrawn for personal use . . . . . . . . . . . . . . Cost of labor. Do not include any amounts paid to yourself.... Materials and supplies . . . Other costs. . . . . . . . . . . . . . . Add lines 35 through 39. . . . . . . . . . . . . . . . . . . . . . 41 Inventory at end of ye 42 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4. . . . . Part IV 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 2018, enter the number 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? . . Yes No 46 Do you (or your spouse) have another vehicle available for personal use?.. . . . . .. . . .. . . Yes 47a Do you have evidence to support your deduction?.. . . . . . . . . . . . . . . . ... Yes Yes Yes No No b If "Yes," is the evidence written? . . . . . Part V Other Expenses. List below business expenses not included on lines 8-26 or line 30. 48 Total other expenses. Enter here and on line 27a . . . . . . . . . . . . . . . . 48 Schedule Form 1010, 2018 Tax Return Assignment #2 You are a new staff accountant at the Kevin Malone CPA Group. Your boss, Kevin Malone, has given you the task of preparing a Form 4562 and Schedule C for Joseph Satte for the tax year 2018. Joseph Gatto owns an unincorporated technology accessory company called Larry's Gadgets. Joe has a new state of the art product called the USB Tire that he plans to roll out. The business address is 12345 Larry Road, New York, NY 10001. Joe's social security number is 111-11- 1111. Joe uses the Lower of Cost or Market (LCM) method to value his inventory. Do not enter any business code. Joe uses the cost method of accounting. For 2018, Joe reports the following items of income and expense: Sales $2,896,750 Cost of Goods Sold $723,400 Office expenses $11,300 Legal services related to lawsuits by customers against the business for the USB stick breaking off while driving $8,500 Legal services related to a personal lawsuit from Sal Vulcang for tattooing Sal without consent $127,000 Salary expenses paid to his only salesman, James Murray $53,700 Rent expense for business office $12,300 Utility expenses $16,000 Advertising expenses $27,500 Depreciation ?????? Information related to Larry's Gadgets depreciation is as follows: Cost of warehouse acquired and placed into service on August 1, 2018: $750,000 Cost of office furniture acquired and placed in service on April 15, 2018 (7-year recovery): $480,000 Depreciation on assets placed in service prior to 2018: $28,000 Please prepare Joe's Form 4562 and Schedule C. Joe elects to expense the maximum amount possible under Section 179 and bonus deprecation for any eligible amounts exceeding the Section 179 maximum. Use 2018 tax forms. You can find the 2018 tax forms on irs.gov. 4562 Depreciation and Amortization (Including Information on Listed Property) Attach to your tax return. Go to www.irs.gov/Form4562 for instructions and the latest information. Business or activity to which this form relates | OMB No. 1545-0172 2018 Attachment Department of the Treasury Internal Revenue fervia 1991 Names shown on return Sequence No. 179 Identifying number - Partl Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. 1 Maximum amount (see instructions) . . . . . . . . . . . . . . . . . . . . . . . 2 Total cost of section 179 property placed in service (see instructions) .. . .. . .. . .. 3 Threshold cost of section 179 property before reduction in limitation (see instructions) ... .. . 4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter-O-. . . . . . . . . . 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married filling separately. See instructions . . . . . . . . . . . . . . . . . . . . . . . 6 (al Description of property (b) Cost business use only) (c) Elected cost 2 3 14 5 id) Recovery business/investment use 7 Listed property. Enter the amount from line 29 . . . . . . 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 . .. . . . 8 9 Tentative deduction. Enter the smaller of line 5 or line 8.... .. .. . .. . .. . . 9 10 Carryover of disallowed deduction from line 13 of your 2017 Form 4562. ... . . . . . . . . 10 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5. See instructions. 11 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11 13 Carryover of disallowed deduction to 2019. Add lines 9 and 10, less line 12 1 3 Note: Don't use Part Il or Part Ill below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year. See instructions. . . . . . . . . . . . . . . . . . . . . . 15 Property subject to section 16810 (1) election . . . . . . . . . . . . . . . . . . . . 15 16 Other depreciation (including ACRS) .. . . . . . . . . . . . . . . 16 Part III MACRS Depreciation (Don't include listed property. See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2018 . . . . . . . 17 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here Section B-Assets Placed in Service During 2018 Tax Year Using the General Depreciation System b) Month and year of Basis for depreciation (a) Classification of property placed in service Method ) Depreciation deduction only period I only see instruction fel Convention see instructions perio 19a 3-year property b 5-vear property C 7-year property d 10-year property e 15-year property f 20-year property g 25-year property h Residential rental property i Nonresidential real property Section C-Assets Placed in Service During 2018 Tax Year Using the Alternative Depreciation System 20a Class life b 12-year c 30-year d 40-year Part IV Summary (See instructions.) 21 Listed property. Enter amount from line 28 .. . .. | 21 22 Total. Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporations-see instructions . 22 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs. . . . . . . 23 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 12906N Form 4562 (2018) Form 4562 (2018) Page 2 Part V Listed Property (Include automobiles, certain other vehicles, certain aircraft, and property used for entertainment, recreation, or amusement.) Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a, 24b, columns (a) through (c) of Section A, all of Section B, and Section C if applicable. Section A-Depreciation and Other Information (Caution: See the instructions for limits for passenger automobiles.) 24a Do you have evidence to support the business/investment use claimed? Yes No 24b If "Yes," is the evidence written? Yes No Depreciation deduction Elected section 179 Business id Basis for depreciation Recovery Method Type of property ist Date placed Investment ad Cost or other basis business/investment I period Convention vehicles first in service percentage use only) 25 Special depreciation allowance for qualified listed property placed in service during 25 the tax year and used more than 50% in a qualified business use. See instructions. 26 Property used more than 50% in a qualified business use: 90 90 % fel 27 Property used 50% or less in a qunlified business use: SIL- SIL- 96 S/L - 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1 . 28 29 Add amounts in column line 26. Enter here and on line 7. page 1 . . . . . . . . . . . 29 Section B-Information on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other "more than 5% owner, or related person. If you provided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. (c) (d) Vehicle Vehicle 3 30 Vehicle 2 Total business/investment miles driven during Vehicles Vehicle 4 Vehicles the year (don't include commuting miles). 31 Total commuting miles driven during the year 32 Total other personal (noncommuting) miles driven . . . . . . . . . 33 Total miles driven during the year. Add lines 30 through 32 . . . . . . . 34 Was the vehicle available for personal Yes No Yes No Yes No Yes No Yes No Yes No use during off-duty hours?..... 35 Was the vehicle used primarily by a more than 5% owner or related person?.. 36 is another vehicle available for personal use? TI Section C-Questions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who aren't more than 5% owners or related persons. See instructions. 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by Yes No your employees? . . . . . . 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See the instructions for vehicles used by corporate officers, directors, or 1% or more owners.. 39 Do you treat all use of vehicles by employees as personal use? . . . . . . . . . . . . . . . . 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the information received?. .. 41 Do you meet the requirements concerning qualified automobile demonstration use? See instructions..... Note: If your answer to 37, 38, 39, 40, or 41 is "Yes," don't complete Section B for the covered vehicles. Part VI Amortization by Date amortization fo Description of costs Amortizable amount Code section Amortization period or percentage Amortization for this year 42 Amortization of costs that begins during your 2018 tax year (see instructions): 43 Amortization of costs that began before your 2018 tax year. . 44 Total. Add amounts in column). See the instructions for where to report .. . .. .. 43 | 44 Form 4562 (2018) SCHEDULE C (Form 1040) Department of the Treasury Internal Revenue Service (99) Name or proprietor 2018 Profit or Loss From Business LOMB No. 1545-0074 (Sole Proprietorship) Go to www.irs.gov/Schedule for instructions and the latest information. Attachment Attach to Form 1010, 1040NR, or 1011; partnerships generally must file Form 1066. Sequence No. 09 Social security number (SSN) A Principal business or profession, including product or service (see instructions) B Enter code from instructions Business name. If no separate business name, leave blank. D Employer ID number (EIN) (seinstr.) J 2 3 Business address (including suite or room no.) City, town or post office, state, and ZIP code Accounting method: (1) Cash (2) Accrual (3) Other (specify) Did you "materially participate in the operation of this business during 2018? If "No," see instructions for limit on losses Yes No If you started or acquired this business during 2018, check here. . . Did you make any payments in 2018 that would require you to file Form(s) 10997 (see instructions) . . . . . Yes No f"Yes," did you or will you file required Forms 10997. , Yes No Part Income 1 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. 2 Retums and allowances. . . . . Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . 4 Cost of goods sold (from line 42) . . . . . . . . 5 Gross profit. Subtract line 4 from line 3. . . . . . . . . . . . . . . . . . 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 6 7 Gross income. Add lines 5 and 6... Part II Expenses. Enter expenses for business use of your home only on line 30. Advertising. . . . 18 Office expense (see instructions) 18 Car and truck expenses (see 19 Pension and profit-sharing plans 19 T instructions). . . . 20 Rent or lease (see instructions: 10 Commissions and fees , 10 a Vehicles, machinery, and equipment 200 11 Contract labor (see instructions) 11 b Other business property . 20b 12 Depletion . . . . . 12 21 Repairs and maintenance . . . 21 Depreciation and section 179 22 Supplies (not included in Part III) . 22 expense deduction (not 23 Taxes and licenses. . . 23 included in Part II) (see instructions). . 13 . . 24 Travel and meals: 14 Employee benefit programs a Travel . . . . . . . 24a (other than on line 19) . 114 b Deductible meals (see 15 Insurance (other than health) 15 instructions) . . . . . . 24b 16 Interest (see instructions): 25 Utilities . 26 a Mortgage (paid to banks, etc.) 16a 26 Wages (less employment credits). 26 b Other . . . . . . 16b 27a Other expenses (from line 48) 27a 17 Legal and professional services 17 b Reserved for future use... 27b 28 Total expenses before expenses for business use of home. Add lines through 27a . . . . 28 29 Tentative profit or loss). Subtract line 28 from line 7. . . . 29 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 L. Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30. . . . 31 Net profit or loss). Subtract line 30 from line 29 If a profit, enter on both Schedule 1 (Form 1040), line 12 for Form 1040NR, 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), line 12 (or Form 1040NR, 32a All investment is at risk. line 13) and on Schedule SE, line 2. of you checked the box on line 1, see the line 31 instructions) 326 Some investment is not Estates and trusts, enter on Form 1041, line 3. at risk If you checked 32b, you must attach Form 6196. Your loss may be limited For Paperwork Reduction Act Notice, see the separate instructions. Cal. No. 11334P Schedule Form 1010, 2018 Schedule C (Form 10401 2018 Part 11 Cost of Goods Sold (see instructions) 33 Method(s) used to value closing inventory: a Cost b Lower of cost or market c O ther (attach explanation) Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes, attach explanation . . . . . . . . . . . . . . . . . . Yes No Inventory at beginning of year. If different from last year's closing inventory, attach explanation.. | 35 | Purchases less cost of items withdrawn for personal use . . . . . . . . . . . . . . Cost of labor. Do not include any amounts paid to yourself.... Materials and supplies . . . Other costs. . . . . . . . . . . . . . . Add lines 35 through 39. . . . . . . . . . . . . . . . . . . . . . 41 Inventory at end of ye 42 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4. . . . . Part IV 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 2018, enter the number 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? . . Yes No 46 Do you (or your spouse) have another vehicle available for personal use?.. . . . . .. . . .. . . Yes 47a Do you have evidence to support your deduction?.. . . . . . . . . . . . . . . . ... Yes Yes Yes No No b If "Yes," is the evidence written? . . . . . Part V Other Expenses. List below business expenses not included on lines 8-26 or line 30. 48 Total other expenses. Enter here and on line 27a . . . . . . . . . . . . . . . . 48 Schedule Form 1010, 2018