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Chad incurred a net operating loss in 2021 of $13,450 which he is carrying forward to 2022. In addition, Chad has provided a list of medical expenses he's incurred for 2022, a mortgage interest statement from Go Prime Mortgage, Inc., detailing the amount of interest paid in 2022, and a 2022 property tax bill from the Gallatin County Assessor's office for his home which he has paid (see exhibits). Included in his list of medical expenses is a stair lift installation that his doctor prescribed. The increase in the fair market value of the home due to the installation was $12,000. He also made charitable contributions to Fresh Life Church in Bozeman, for $6,500 and donated $5,000 to Black Dog Haven, a local, for-profit shelter, and gave $500 to a needy family in Bozeman. Chad has asked you to complete his tax return for the year 2022. Prepare Form 1040 page 1 and 2, Schedule 1, Schedule A, and Schedule E page 2. We use 2021 tax forms because 2022 tax forms are not available at the time of publication. Tax Return Problem - Deductions Focus Chad Everhart, age 56, is a geologist living in Bozeman, MT. His address is 426 Ridgetop Road, Bozeman, MT, 59717. Chad's social security number is 123-45-6789, and he works as a geologist for the Roughstock Mining 00., also located in Bozeman. Chad received a 2022 form W2 reporting his earnings and withholdings from his employer. Although Chad is currently single, he was formerly married to Dena Everhart, and together they have two teenage children. Chad & Dena's divorce was finalized in 2018 (see exhibits for settlement agreement). In addition to his work as a geologist, in 2021, Chad and four of his business colleagues decided to form an oil and gas limited partnership. Chad invested $100,000 cash, along with a piece of equipment, for a 20% interest in the partnership. At the time of the investment, the property contributed had a fair market value of $50,000 and an adjusted basis of $20,000. The partnership has five owners, and Chad does not materially participate in the business, contributing about 200 hours per year to the operations. In 2021, the business had no recourse debt. The business had an operating loss of $10,000, resulting in a $2,000 passive loss for Chad. (See Chad's 2021 K1 from Five-Guys from MT.) For 2022, the business had $40,000 in operating income. (See Chad's 2022 K1 from Five-Guys from MT.) 651121 Final K-1 Amended K-1 OMB No. 1545-0123 Schedule K-1 2021 Part III Partner's Share of Current Year Income, (Form 1065) Deductions, Credits, and Other Items Department of the Treasury Ordinary business income (loss) 14 Self-employment earnings (loss) Internal Revenue Service For calendar year 2021, or tax year (2,000) beginning / 2021 ending Net rental real estate income (loss) Partner's Share of Income, Deductions, 3 Other net rental income (loss) 15 Credits Credits, etc. See back of form and separate instructions. Part | Information About the Partnership 4a Guaranteed payments for services A Partnership's employer identification number 92-5147892 4b Guaranteed payments for capital 16 Schedule K-3 is attached if B Partnership's name, address, city, state, and ZIP code checked Five Guys from MT 4c Total guaranteed payments 17 Alternative minimum tax (AMT) items PO Box 567 Bozeman, MT 59715 5 Interest income IRS center where partnership filed return 6a Ordinary dividends D Check if this is a publicly traded partnership (PTP) Part II Information About the Partner 6b Qualified dividends 18 Tax-exempt income and nondeductible expenses E Partner's SSN or TIN (Do not use TIN of a disregarded entity. See instructions.) 123-45-6789 6c Dividend equivalents Name, address, city, state, and ZIP code for partner entered in E. See instructions. Royalties Chad Everhart 426 Ridgetop Road Net short-term capital gain (loss) Bozeman, MT 59717 19 Distributions G X General partner or LLC Limited partner or other LLC 9a Net long-term capital gain (loss) member-manager member H1 X Domestic partner Foreign partner 9b Collectibles (28%) gain (loss) H2 If the partner is a disregarded entity (DE), enter the partner's: 20 Other information DIN Name 9c Unrecaptured section 1250 gain 11 What type of entity is this partner? Individual If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check here 10 Net section 1231 gain (loss) Partner's share of profit, loss, and capital (see instructions): Beginning Ending 11 Other income (loss) Profit 0 % 20 % Loss 0 % 20 % Capital 0% 20 % Check if decrease is due to sale or exchange of partnership interest 12 Section 179 deduction 21 Foreign taxes paid or accrued K Partner's share of liabilities Beginning Ending 13 Other deductions Nonrecourse Qualified nonrecourse financing Recourse S Check this box if Item K includes liability amounts from lower tier partnerships Partner's Capital Account Analysis 2 More than one activity for at-risk purposes" Beginning capital account 0 23 More than one activity for passive activity purposes* Capital contributed during the year 120,000 *See attached statement for additional information. Current year net income (loss) (2,000) Other increase (decrease) (attach explanation) Withdrawals and distributions Ending capital account 118,000 For IRS Use Only M Did the partner contribute property with a built-in gain (loss)? Yes No If "Yes," attach statement. See instructions. N Partner's Share of Net Unrecognized Section 704(c) Gain or (Loss) Beginning Ending For Paperwork Reduction Act Notice, see the Instructions for Form 1065. www.irs.gov/Form1065 Cat. No. 11394R Schedule K-1 (Form 1065) 2021CORRECTED (if checked) RECIPIENT'S/LENDER'S name, street address, city or town, state or "Caution: The amount shown may OMB No. 1545-1380 province, country, ZIP or foreign postal code, and telephone no. not be fully deductible by you. Limits based on the loan amount Form 1098 Mortgage Go Prime Mortgage Inc. and the cost and value of the 2015 Charlotte Street secured property may apply. Also, Interest you may only deduct interest to the (Rev. January 2022) Bozeman, MT 59718 extent it was incurred by you, actually paid by you, and not For calendar year Statement reimbursed by another person. 20 22 1 Mortgage interest received from payer(s)/borrower(s)" Copy B $ 18,135 For Payer/ RECIPIENT'S/LENDER'S TIN PAYER'S/BORROWER'S TIN 2 Outstanding mortgage 3 Mortgage origination date Borrower principal The information in boxes 1 $ 416,187 11/1/2017 hrough 9 and 11 is 91-1472581 123-45-6789 4 Refund of overpaid 5 Mortgage insurance important tax information interest premiums and is being fumished to the IRS. If you are required PAYER'S/BORROWER'S name $ $ to file a return, a negligence 6 Points paid on purchase of principal residence penalty or other sanction Chad Everhart $ may be imposed on you if the IRS determines Street address (including apt. no.) 7 If address of property securing mortgage is the same that an underpayment of as PAYER'S/BORROWER'S address, the box is checked, or tax results because you 426 Ridgetop Road the address or description is entered in box 8. overstated a deduction for this mortgage interest or for City or town, state or province, country, and ZIP or foreign postal code 8 Address or description of property securing mortgage these points, reported in boxes 1 and 6; or because Bozeman, MT 59717 you didn't report the refund of interest (box 4); or 9 Number of properties securing the 10 Other because you claimed a mortgage nondeductible item. 11 Mortgage acquisition date Account number (see instructions) Form 1098 (Rev. 1-2022) (Keep for your records) www.irs.gov/Form1098 Department of the Treasury - Internal Revenue ServiceGALLATIN COUNTY ASSESSOR'S OFFICE PROPERTY TAX BILL DUE JUNE 30, 2022 Location of Property: 427 Ridgetop Road, Gallatin County Bozeman, MT 59718 Owner of Record: Chad Everhart Estimated FMV: $715,725 Taxes Due: $12,040IN THE CIRCUIT COURT OF THE FIFTH JUDICIAL CIRCUIT, IN AND FOR Bozeman, MT Case No.: 46 Division: 131 March 10, 2018 Dena Kay Everhart, Petitioner and Chad Everhart, Respondent MARITAL SETTLEMENT AGREEMENT Dena Kay Everhart of 1945 Longneck Lane, Bozeman, MT, 59715, born March 15, 1972, and Chad Everhart of 426 Ridgetop Road, Bozeman, MT, 59?17, born October 12, 1966, being sworn do hereby state the following statements are true and correct. This Agreement serves as a full and nal settlement all matters arising from the dissolution oftheir marriage, including division of all property rights, debts, spousal support, child custody, visitation, and child support. The parties agree this Agreement contains a fair,just, and equitable division of property, and subject to court approval agree as follows: 1. JURISDICTION. Dena Kay Everhart and Chad Everhart have resided in Gallatin County for at least six {5 months) before the petition in the above-entitled action was led which satises Montana's residency requirements. 2. ARMED FORCES. Neither party is a member of the armed forces. 3. MARRIAGE DATE. The parties were married to each other on March OS, 1996 in Bozeman, MT, and 2 children were born to this marriage. The minor children of the marriage are as follows: Son, age 15 and Daughter, age 13 The parties are not currently expecting any children. 4. SEPARATION DATE. The parties\" date of physical separation is Jan. 2, 2018. 5. CAUSE OF DISSOLUTION. The parties acknowledge that the marriage has been irretrievably broken due to irreconcilable differences, and they are beyond reconciliation. 6. DISCLOSURE. The parties acknowledge that each has made a full disclosure of all assets and debts ownedjointly or individually. Nothing has been withheld and each party believes that other has been truthful in their disclosure. The parties waive the requirement to file a Financial Afdavit as each party has voluntarily made a full disclosure to the other of all assets and debts. The parties further waive any additional disclosure required under 12.285, Montana Family Law Rules of Procedure. 9. CUSTODY. The parties acknowledge that this is the home state of the child pursuant to the state's Uniform Child Custody Jurisdiction and Enforcement Act. The child has resided in this state for more than six months before this action began and no other court has made a child custody determination. CHILD CUSTODY 8; VISITATION. Custody of the children, is awarded to the mother. The parties acknowledge that issues of child custody or visitation relative to the parties' children have been determined by the Bozeman Judicial Court of Bozeman in the state of Montana under docketfcase number 12%. That court maintains continuing and exclusive jurisdiction over issues relating to the minor child of this marriage. A copy of all orders entered relative to custody or visitation is attached to this Agreement and shall be incorporated into anyJudgment or Decree of Divorce subsequently entered. CHILD SUPPORT. The parties acknowledge that the issue of child support has been determined by the Bozeman Judicial Court of Bozeman in the state of Montana under docketfcase number 12356. Under this court order Chad Everhart is responsible for paying child support in the amount of $750.00 monthly. That court maintains continuing and exclusive jurisdiction over issues relating to the minor child of the marriage. A copy of all orders entered relative to child support is attached to this Agreement and shall be incorporated into any Judgment or Decree of Divorce subsequently entered. 10. 11. 12. COOPERATION. The parties agree to cooperate with one another in signing any papers or legal documents needed to nalize this Agreement or any provision contained in this Agreement, including deeds, title certificates, etc. Within 10 days of notication of Entry of Judgment, the parties shall execute any document, transfer papers, titles, or other documents to affect the provisions of this Agreement and any resulting Decree of Divorce. In the event a party fails to sign transfer documents, the nal Decree of Divorce shall operate to transfer title. DIVISION OF ASSETS. Each party shall receive any and all, tangible and intangible, property, in his/her possession including personal items and household goods unless otherwise stated in this Agreement. FUTURE EARNINGS AND ACQUISITIONS. All income, earnings, or other property received or acquired by either party to this Agreement on or after the date of execution of this Agreement shall be the sole and separate property of the receiving or acquiring party. Each party, as of the effective dates of this Agreement, does hereby and forever waive, release, and relinquish all the right, titie, and interest in all such income, earnings, and other property except as necessary to collect any sums due hereunder in the event of default. 13. DEBTS. Each spouse will be responsible for any indebtedness incurred in his or her individual name prior to the date of marriage unless otherwise specifically stated in this Agreement. Each spouse will be responsible for any indebtedness incurred in his or her individual name subsequent to the date of separation March 10, 2018 unless otherwise specifically stated in this Agreement. Each spouse will be responsible for any indebtedness incurred in his or her individual name during the course of the marriage unless otherwise specifically stated in this Agreement. 14. SPOUSAL SUPPORT/ALIMONY. Dena Kay Everhart, has been married for 22 years. Chad Everhart is 56 years of age. He has been a good provider and has the ability to pay spousal support. Chad Everhart agrees to pay Dena Kay Everhart spousal support in the amount of $400.00 per month until ex-spouse remarries or dies.2022 Medical Expenses, Chad Everhart 1. Jan. 5, 2022, morbid obesity diagnosis and underwent weight loss surgery $ 5,356 2. Feb 9, 2022, acupuncture treatments for low-back pain $ 2,375 3. March 27, 2022, stair-lift installation $16,500 4. April 5, 2022, follicular unit extraction (hair transplants) $ 4,300 5. Jan. 1, 2022 - Dec. 31, 2022 - various doctor visits for wellness checkups $ 624 6. Jan. 1, 2022 - Dec. 31, 2022 - over-the-counter drugs including sleep remedies and cold medications. $ 95 7. Jan 1, 2022 - Dec. 31, 2022 - doctor prescribed medications $ 1,343 8. July 7, 2022 - prescription sunglasses $ 650 9. Oct. 2, 2022 - auto seat replacement to relieve discomfort (not prescribed) $ 1,252 10. Dec. 2, 2022 - installed big-screen TV to relieve eye strain $ 733651119 Final K-1 Amended K-1 OMB No. 1545-0123 Schedule K-1 2022 Part III Partner's Share of Current Year Income, (Form 1065) Deductions, Credits, and Other Items Department of the Treasury Ordinary business income (loss) 15 Credits Internal Revenue Service For calendar year 2022, or tax year 8,000 beginning 9 [ / / 2022 ending 2 Net rental real estate income (loss) Partner's Share of Income, Deductions, Other net rental income (loss) Foreign transactions Credits, etc. See separate instructions. Part ! Information About the Partnership 4a Guaranteed payments for services A Partnership's employer identification number 92-5147892 4b Guaranteed payments for capital B Partnership's name, address, city, state, and ZIP code Five Guys From MT, PO Box 567, Bozeman, MT, 59715 Total guaranteed payments Interest income C IRS Center where partnership filed return D Check if this is a publicly traded partnership (PTP) 6a Ordinary dividends Part II Information About the Partner E Partner's SSN or TIN (Do not use TIN of a disregarded entity. See instructions.) 6b Qualified dividends 123-45-6789 F Name, address, city, state, and ZIP code for partner entered in E. See instructions. Dividend equivalents 17 Alternative minimum tax (AMT) items Chad Everhart, 426 Ridgetop Road, Bozeman, MT 59717 Royalties G General partner or LLC Limited partner or other LLC 8 Net short-term capital gain (loss) member-manager member H1 X Domestic partner Foreign partner Net long-term capital gain (loss) 18 Tax-exempt income and 12If the partner is a disregarded entity (DE), enter the partner's: nondeductible expenses TIN Name 9b Collectibles (28%) gain (loss) 11 What type of entity is this partner? Individual 12 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check here 9c | Unrecaptured section 1250 gain Partner's share of profit, loss, and capital (see instructions): Beginning Ending Net section 1231 gain (loss) Profit 20 % 20 % 19 Distributions Loss 20 % 20 % 11 Other income (loss) Capital 20 % 20 % Check if decrease is due to sale or exchange of partnership interest 20 Other information K Partner's share of liabilities: 12 Section 179 deduction Beginning Ending Nonrecourse $ 13 Other deductions Qualified nonrecourse financing 0 $ 40,000 Recourse $ $ Check this box if Item K includes liability amounts from lower tier partnerships. Partner's Capital Account Analysis 14 Self-employment earnings (loss) Beginning capital account 118,000 Capital contributed during the year . Current year net income (loss) 8,000 Other increase (decrease) (attach explanation) $ 21 More than one activity for at-risk purposes* Withdrawals & distributions $ 22 More than one activity for passive activity purposes' Ending capital account 126,000 *See attached statement for additional information. M Did the partner contribute property with a built-in gain or loss? Yes No If "Yes," attach statement. See instructions. For IRS Use Only Partner's Share of Net Unrecognized Section 704(c) Gain or (Loss) Beginning Ending For Paperwork Reduction Act Notice, see Instructions for Form 1065. www.irs.gov/Form1065 Cat. No. 11394R Schedule K-1 (Form 1065) 2020a Employee's social security number Safe, accurate, Visit the IRS website at IRS 123-45-6789 OMB No. 1545-0008 FAST! Use file www.irs.gov/efile b Employer identification number (EIN) Wages, tips, other compensation 2 Federal income tax withheld 94-5527811 132,550 25.879 c Employer's name, address, and ZIP code 3 Social security wages Social security tax withheld Roughstock Mining Company 132,550 8,218 4671 Shandalyn Lane 5 Medicare wages and tips 6 Medicare tax withheld Bozeman, MT 59718 132,550 1,921 7 Social security tips Allocated tips d Control number 10 Dependent care benefits e Employee's first name and initial Last name Suff. 11 Nonqualified plans 12a See instructions for box 12 Chad Everhart 426 Ridgetop Road 13 Statutory Retireman Third-party employee sick pay 12 Bozeman, MT 59717 14 Other 12c f Employee's address and ZIP code 15 State Employer's state ID number 16 State wages, tips, etc. 17 State income tax 18 Local wages, tips, etc. 19 Local income tax 20 Locality name MT 852743211 132,550 9.146 Form W-2 Wage and Tax Statement 2022 Department of the Treasury-Internal Revenue Service Copy B-To Be Filed With Employee's FEDERAL Tax Return. This information is being fumished to the Internal Revenue Service