Please use 2021 forms to complete this problem. Go to IRS.GOV and put each schedule/form name (Form 1040, Schedules 1, 2, 3, B, C, D, E, and Form 8949 (as needed) in the Search box on the IRS website and download the forms. You should prepare the 2021 federal income tax return for the Chapmans online or print the forms and complete them my hand. Once you have completed the information requested in the problem, scan the forms into your email and send them to the instructor. Calculate the ordinary income tax using the schedules provided in your textok. Calculate the capital gains tax on the qualified dividends and the net gain from the sale of capital assets. Prepare Schedule SE calculating the self-employment tax. When filling in an item on the Form 1040, place the number on the assignment it represents to the right and circle it. This will make it easier for me to grade and follow what you are doing. (So for the Salary item on the Form 1040, you should include the salary amount and to the right put a number 3 and circle it.) If there are items that are not included on the Form 1040 because they are not taxable, please provide a separate sheet with an explanation indicating which items are not taxable and why.

Tax I Income Tax Return Facts

Bobby and Susie Chapman were married on December 31, 2021. They live at 755 Emerald Bay Drive, Rome, Georgia 30000. They want to file a joint income tax return based on the following information.

1. Bobby has one child, Samantha Chapman, who is 24 and a full-time student. She is not at home, except during the summer. He provides more than half of her support. She has a job as a research assistant where she made $15,500 during 2021.

2. Susie has two children, James and John Smith. James and John are 22 and 25 respectively, live with Susie and Bobby and are models for an international clothing company. They are full time college students and model during the summer and school vacations. James made $35,000 last year modeling and John made $4,000. This income was placed in separate college funds for each child. Susie paid more than half of their support.

3. Bobby worked as a college professor at the local college. His salary reflected on his W-2 for the year is $72,000. His W-2 also reflected that he had $6,000 withheld in federal income tax.

4. Bobby retired his job as a professor at the local college on July 1, 2021. He receives $3,500 a month in retirement. Bobbys 1099-R reflects that $2,800 of these payments were taxable. The 1099-R also shows that he had $3,200 withheld in federal income tax during 2015.

5. Susie has $392 in interest income from US Treasury bonds and $875 in interest from City of Toledo bonds. She also has $545 in interest from bonds issues by the State of Alabama.

6. Bobby received a 1099 INT indicating that he received $625 in interest income from a CD at the Bank of York. He also has corporate IBM bonds which paid $750 in interest during 2021.

7. James and John both have savings accounts at Investar Bank. James received a 1099-INT indicating he had $225 in interest and Johns 1099-INT indicated that he had $345 in interest.

8. Susie works as a violin instructor and music teacher at Rome Academy. Her W-2 indicates that she had a salary of $22,500 during 2021 with $9,000 federal income tax withheld. Susie started working in August. She was unemployed from January until August and received $10,500 in unemployment benefits.

9. During the year Susie was injured when she fell going up the stairs to perform. She received $1,875 in workmans compensation benefits. Her health insurance also paid $3,650 in payments to doctors and physical therapists as a result of her injury.

10. Susie, Bobby, and their dependents have health insurance through Bobbys employer, and this health insurance continues after Bobby retires. They pay $125 a month for insurance. The employer pays the remainder of the $400 premium. (The employer pays $275 a month for the insurance.)

11. When Bobby retired, he went on a trip with his friends and visited a casino where he won $3,600 gambling. The casino withheld $720 in federal income tax.

12. Bobbys father gave him a house at the beach when Bobby retired. The house was worth $1,200,000 on the date Bobby received the house, and Bobbys father paid $780,000 for the house in 2000.

13. Susie is also a self-employed violin instructor in addition to working as an employee of Rome Academy. She had net income of $5,800 during 2021 from her lessons. She also plays with the Atlanta Symphony from which she received a 1099 MISC in the amount of $18,000 for playing 6 concerts.

14. Bobby purchased a small apartment building with four units when he retired so he would have something to do. His net rental income from the apartments is $12,725. He did not have any deductible expenses. He also made estimated payments for the third and fourth quarters of $600 each quarter.

15. Susies mother died, leaving her jewelry to Susie. The jewelry is valued on the date of death at $52,600. Susie found all of the receipts where her mother had purchased the jewelry. Susies mother had paid $45,000 for all of the jewelry.

16. Susie owns several stocks. She received $850 in dividends from Pepsi and $1,650 in dividends from GMC. She has owned both stocks several years, and both are qualified dividends.

17. When Bobby retired, Bobbys employer gave a huge party in his honor. They also presented him with a watch valued at $390 and a check in the amount of $2,500 for his loyalty to the college and his working 30 years.

18. Susies receives a scholarship from the local college to get a degree in kinesiology to compliment her career as a personal trainer. She receives scholarship for tuition and fees $4,200 and books $800.

19. Bobby also owns an oil well. He received a 1099-MISC indicating that he had $4,800 in royalties during 2021. 20. Susie sold 500 shares of GMC stock for $250 per share on December

20, 2021. She had purchased the stock on July 14, 2018 for $190 a share.

21. Bobby and Susie have itemized deductions of $22,600.

22. Susies employer, Rome Academy, gives free soft drinks and lunch worth $2,200 while she is at work. Susie is not allowed to leave campus during the day for lunch. They also provide Susie with 5 Rome Academy shirts worth $20 each to wear every day.

23. Rome Academy also provides Susie with a free card to attend all of the Rome Academy sporting events. The card is worth $575.

24. Bobby had purchased a commercial real estate lot for $125,000 on April 30, 2020 for a business he wanted to start. He made $22,000 in improvements, leveling the lot and installing curbing and sidewalks. He has decided not to start the business and sold the lot on March 15, 2021 for $150,000. The selling expenses paid by Bobby were $7,500. 25. Bobby also owned a rental house that he purchased for $285,000 in June 1990. The house sold on May 20, 2021 for $225,000.