COMPREHENSIVE PROBLEM John and Ellen Brite are married, file a joint return, and are less than 65 years old. They have Additional Facts: no dependents and claim the standard deduction. John owns an unincorporated specialty elec- trical lighting retail store, Brite-On. Brite-On had the following assets on January 1, 2021: . Equipment acquired in 2016: The Brites elected out of bonus depreciation and did not elect Sec. 179. Assets Cost . Equipment acquired in 2021: The Brites elected Sec. 179 to expense the cost of the 5-year equipment. Old store building purchased April 1, 2006 $100,000 Equipment (7-year recovery) purchased January 10, 2016 30,000 . Assume that the lease inclusion rules require that Brite-On reduce its annual deduct- Inventory valued using FIFO method: 4,000 light bulbs $5/bulb ible lease expense by $41. Compute the Brite's taxable income and balance due or refund for 2021. Brite-On purchased a competitor's store on March 1, 2021, for $206,000. The purchase price included the following: New store building $115,000 (FMV) Refer to the facts in Problem I:10-47 for John and Ellen Brite. The following information is also available for them: Land 28,000 (FMV) Equipment (5-year recovery) 45,000 (FMV) . John (SSN 123-45-6789) and Ellen (SSN 234-56-7890) live at 111 Maple Street, Inventory: 3,000 light bulbs $ 6/bulb (cost) Johnsonville, Colorado 81733. . Brite-On is located at 3900 Market Street, Johnsonville, Colorado 81733. Its employer On June 30, 2021, Brite-On sold the 7-year recovery period equipment for $12,000. identification number is 44-1357924. Brite-On leased a car for $860/month beginning on June 1, 2021. The car is used 100% . The business uses the accrual method and did not make any payments that would require for business. Form 1099 to be filed. It has used the cost method to value inventory for many years. Brite-On sold 8,000 light bulbs at a price of $15/bulb during the year. Also, Brite-On made additional purchases of 4,000 light bulbs in August 2021 at a cost of $7/bulb. . John and Ellen do not have any transactions involving virtual currency. Brite-On had the following revenues (in addition to the sales of light bulbs) and additional Complete the Brites' 2021 Form 1040, Schedules 1, 2, C, and SE, and Forms 4562, 4797, expenses: and 8995. Service revenues $94,000 Interest expense on business loans 6,000 Auto expenses (gas, oil, etc.) 4,800 Taxes and licenses 3,300 Utilities 2,800 Ellen receives $42,000 of wages from employment elsewhere, from which $4,000 of fed- eral income taxes were withheld. John and Ellen made four $3,100 quarterly estimated tax payments. For self-employment tax purposes, assume John spent 100% of his time at the store while Ellen spends no time at the store