Christopher Crosphit $($birthdate April $28,1981,$ Social Security number $565-12-6789)$ and Traynor Crosphit $($birthdate July $17,1980)$ are married filing jointly in $2023.$ They have a dependent son, Arnold $($Social Security number $276-23-3954).$ Arnold $($birthdate July $1,2005)$ is a high school student; he does not qualify for the child tax credit but does qualify for the $$500$ other dependent credit.

Chris owns and operates a health club called $$Catawba Fitness.$$ The business is located at $4321$ New Cut Road, Spartanburg, SC $29303.$ The principal business code is $812190$ and the EIN is $12-3456789.$ Chris had the following income and expenses from the health club:

Income$$216,000$Expenses:Business insurance$3,500$Office supplies$3,400$Payroll$99,000$Payroll taxes$9,000$Travel$2,550$Meals$2,100$Business gifts$800$Equipment maintenance$10,700$Cleaning service$8,800$Equipment rent$22,500$Utilities$14,000$Telephone$2,700$Rent$32,000$Advertising$4,000$Special workout clothing and boxing gloves$750$Subscription to Biceps Monthly magazine$100$Online educational seminar on gym safety$800$Other expenses$1,800$

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

Travel includes a trip to a weight$-$lifting seminar in Miami, FL$.$ The one$-$day seminar cost $$450.$ Chris took Traynor and Arnold with him. Airfare was $$400$ for each of them. The seminar started early in the morning, so they flew down the night before and then left the following morning since the seminar ended late in the day. Traynor and Arnold went to Miami Beach for the day. Lodging was $$250$ per night for two nights and meals were $$100$ for each of the three of them $($$$300$ total$).$ They also paid $$100$ for ground transportation from the airport to the hotel hosting the seminar.

Meals includes $$1,000$ for a staff party for all employees of Catawba Fitness, $$800$ in restaurant meals, and $$300$ in non$-$restaurant meals.

Chris purchased business gifts for $20$ customers at a cost of $$40$ each.

The Crosphits live next door to the health club at $4323$ New Cut Road. Chris does all the administrative work for the health club out of an office in their home because the gym lacks any suitable space. The room is $171$ square feet and the house has a total of $1,800$ square feet. The Crosphits pay $$20,000$ per year in rent and $$4,000$ in utilities. Chris would prefer to use the simplified method to deduct his home office if possible.

Traynor works as a sales representative for an online manufacturer and distributor of exercise bicycles. Her W$-2$ follows $($see separate tab$).$

Chris ran up credit card debt in $2023$ and was able to negotiate a reduction of his balance. He received the following $1099-$C $($see separate tab$).$

Chris also dabbles as a broker of antique and rare books. He acquires and scavenges for books and then sells them on the Internet. He generated $$4,000$ of sales in $2023$ and the books he sold cost $$3,500.$ He also incurred $$7,600$ in travel and other expenses related to this activity. Chris has never turned a profit in the book business, but he loves books and book selling and does not mind losing money doing it$.$

The Crosphits withdrew $$2,000$ from the health care flexible account with Traynor$$s employer to pay for Arnold$$s orthodontic work.

Chris made an estimated tax payment to the IRS of $$300$ on April $15,2023.$

Required:

Complete the Crosphit$$s federal tax return for $2023$ on Form $1040,$ Schedule $1,$ and Schedule C$.$ Do not complete Form $4562($depreciation$).$ Although the taxpayer is eligible for the Child or Other Dependent Tax Credit and Schedule $8812$ is normally completed, we are giving you the amount to be entered directly on Form $1040.$ Assume the taxpayer had full$-$year health coverage and does not want to contribute to the presidential election campaign.

Make realistic assumptions about any missing data.

If required, enter a "loss" as a negative number on the tax form. Do not enter deductions or other amounts as negative numbers.

If an amount box does not require an entry or the answer is zero, enter $"0".$

Round any percentages to two decimal places.

Round any dollar amounts to the nearest dollar.

Schedule C