Problem 3-1 Schedule C (LO 3.1, 3.3, 3.5, 3.7)

Scott Butterfield is self-employed as a CPA. He uses the cash method of accounting, and his Social Security number is 644-47-7833. His principal business code is 541211. Scott's CPA practice is located at 678 Third Street, Riverside, CA 92860. Scott's income statement for the year shows the following:

\fMeals and Entertainment 4,400 5,500 Ofce Expense 200 150 Postage and Delivery 100 50 Prihting and Reproduction 50 100 Ofce Rent 12,000 14,000 Travel 900 865 Utilities 3,000 2,978 TOTAL OPERATING EXPENSES 25,800 29,193 NH INCOME (LOSS) $70,100 $70,814 Scott also mentioned the following: o The expenses for dues and subscriptiohs were his country club membership dues for the year. . $400 of the charitable contributions were made to a political action committee. . Scott does not generate income from the sale of goods and therefore does not record supplies and wages as part of cost of goods sold. . Scott placed a business auto in service on January 1, 2019 and drove it 4,000 miles for business {equally over the course of the year], 3,250 miles for commuting, and 4,500 miles for nonbusiness purposes. No business expenses for the car are included above. Scott wishes to use the standard mileage method. His wife has a car for personal use. . Meals and Entertainment expense includes $2,500 related to golf greens fees for entertaining clients, $1,000 for business meals provided by restaurants, and $900 for the bagels and doughnuts once a month for all employees. Compiete Schedule C for Scott showing Scott's net taxabie profit from seifemployment. Assume Scott has evidence to support his deductions. If required, only use the minus Sign to indicate a net loss. when required, round amounts to the nearest dollar. OMB No. 154570074 SCHEDULEC (Farm 1040) Profit or Loss From Business [Sole Proprietorship) 2022 Attachment Sequence No. 09 D Go to www.irs.gov/5chedulec inr instructions and the latest information. i Attach to Form 1040, 1040-SR, 1040-NR, or 1041; partnerships must generally le Form 1065. Departmeht of the Treasury Internal Revenue Service Name of proprietor Scott Butterlield Social security number (SSN) 64474777833 Enter code from nstruct ns t 5412] D Employer ID number (EIN ), (see instr.) A Principal business or profession, including product or service (see instructions) Accounting Services E Business name. If no separate business name, leave blank. x. nusmess name. n nu separate uusmess name, leave mmm. u :mpwyc: lu uumum um\anytime ueuuuuuli um muuueu 2.: name; all\" "tenses ............... 2.. in Part III) (see instructions) 13 24 Travel and meals: - 14 Employee benet programs a Travel . . 24a Z (other than on line 19) ....... 14 b Deductible meals 15 Insurance [other than health) 15 C (see instructions) ............... 24b S 16 Interest (see instructions): - 25 Utilities ................ 25 E Mortgage (paid t0 banks, etc.) 166 26 Wages (less employment credits) ..... 26 C Other ................... 16b 27a Other expenses {from line 48) ....... 27a E 17 Legal and professional services 17 b Reserved for future use ...... _ 28 Total expenses before expenses for business use of home. Add iines B through 27a .............. b 28 S 29 Ten ve prot or (loss). Subtract iine 28 from line 7 .................................. 29 E 3|) Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8329 unless using the simplied method. See instructions. Simplied method iilers only: Enter the total square footage of (a) your home: and (b) the part of your home used for business: Use the Simplied Method Worksheet in the instructions to gure the amount to enter on line 30 ................................. 3|) 31 Net prot or (loss). Subtract line 30 from line 29. - If a profit, enter on both Schedule 1 (Form 1040), line 3, and on Schedule SE, line 2. (If you 31 S checked the box on iine 1, see instructions). Estates and trusts, enter on Form 1041, line 3. - If a loss, you must go to iine 32. 32 If you have a loss, check the box that describes your Investment In this actwlty. See Instructlons. 32a 3 All investment is c If you checked 32a, enter the loss on both Schedule 1 (Form 1040], line 3, and on Schedule SE, at risk line 2. (If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on Form 1041, line 3_ 32b 2: Some investment - If you checked 32b, you must attach Form 6198. Your loss may be limited. is \"m at HS"- For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P Schedule C (Form 1041]) 2022 Schedule C (Form 1040) 2022 Page 2 Schedule C {Form 1040) 2022 Page 2 33 34 35 36 37 38 39 40 41 42 Cost of Goods Sold (see instruc ns) Method(sj used to value closing inventory: a 3 Cost is 3 Lower of cost or market I: 3 Other {attach explanation) Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If \"Yes," attach explanation .............................................................. :I Yes :I lilo 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 ..................................... 36 Cost of labor Do not include any amounts paid to yourself .................................... 37 Materials and supplies ............................................................. 38 Other costs ..................................................................... 39 Add lines 35 through 39 ............................................................ 4|] Inventory at end of year ............................................................ 41 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4 ................ 42 [niormation on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to le Form 4562 for this business. See the instructions for line 13 to nd out if you must le Form 4562. 43 45 46 47a I1 when did you place your vehicle in service for business purposes? (monthfdayfyear) b V Of the total number of miles you drove your vehicle during 2022, enter the number of miles you used your vehicle for: aBusiness b Commuting (seeinstructions) c Other _:_ Was your vehicle available for personal use during off-duty hours'? .................................. Do you (or your spouse) have another vehicle available for personal use?I ............................. Do you have evidence to support your deduction? ............................................. If \"Yes," is the evidence written? ......................................................... n ma... 5.--..-" M--. we-.. mm.-. M. mm... M. \"W a 1. n. \"M an Other Expenses. Ust below business expenses not included on lines 326 or line 30. v EU I: Not applicable Printing Nondeductible portion of meals and entertainment Country club dues 48 Total other expenses. Enter here and on line 273 ......................................... 48 |:| Schedule C (Form 104012022 \fTOTAL 0 P E RATING EXPENSES NH The bookkeeper provided the following additional infon'nation: The business uses the cash method of accounting and has no accounts receivable orinventory held for resale. Advertising and Promotion Donations Insurance Meals and Entertainment Subscriptions Business Gifts Telephone Training Travel Other INCOME (LOSS) Donations expense is a $500 donation to the Campaign to Re-Elect Senator ami Dahla. L500 700 600 sou 4,000 870 2,300 2,100 120 120 790 one 2,015 1,955 L975 , 865 750 1,700 2,724 15,865 10,320 195 $7,302 Training inciudes $575 for an educational seminar on bug control. It also inciudes the cost for Russell to attend an online certificate program in iandscaping in order to improve his skills and advertise his designation as a certied landscaper. The tuition, fees, and books cost $1,400. No business gift exceeded $22 in value. The subscription is for a trade magazine titled Piants Unlimited. Meals and entertainment expense is $1,500 of restaurant business meals and $800 for season tickets to Boise State University that Russell uses to entertain potential clients. Russell drove his pickup truck (purchased 3,1141'2021) 200 business miles through June 30 and 300 business miles for the remainder of 2022. He also drove the truck 2,300 commuting miles and 3,000 other miles. The Longs have another car available for personal use. Truck business miieage is not reected in the income statement. In addition to the above expenses, the Longs have set aside one room of their house as a home ofce. The room is 192 square feet and their house has a totai of 1,600 square feet. They pay $13,200 per year rentai on their house, and the utiiities amount to $1,800 for the year. The Longs inherited a iarge number of acres of farm land from Linda's father in 2021 and sold it immediately for its market value of $1,000,000. The}.l invested the proceeds in the Potato Dividend High Yield Fund and received Form 10997D1V (see separate tab). Linda lost her job in late 2021 and collected unemployment as shown on Form 10996 (see separate tab). Russeli was divorced on April 1, 2020 and pays his exspouse, Lois Long {SSN 313-29-3133] alimony of $200 per month in 2022. Russell's Social Security number is 66479875678 and Linda's is 5547903946. They made an estimated tax payment to the IRS of $300 on December 31, 2022. Required: Complete the Longs' federal tax return for 2022 on Form 1040, Schedule 1, Schedule B, Schedule C, Form 8829, and the Qualified Dividends and Capital Gain Tax Worksheet. - Do not oomplete Form 4562 (depreciation) or Form 8312 [additional child tax credit). You may ignore any related self empluyment taxes. 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. - Do not round anv division. If required, round your final answers to the nearest dollar. Linda Long's Form 10997DIV and Form 10996 The Longs inherited a large number of acres of farm land from Linda's father in 2021 and sold it immediately for its market value of $1,000,000. They invested the proceeds in the Potato Dividend High Yield Fund and received the following Form 10997DIV. j CORRECTED [if checked) FAYER 5 name, street address, city or town, state or prownce, 1a Total ordinary OMB No. 154541110 country, ZIP or foreign postal code, and telephone no. dividends _ _ DIVIdends $ 26,000.00 2022 and Potato DIvrdend ngh Yleld Fund 1b Qualied 1100 W. Front Street, 8th Fl. Boise, ID 83102 dwidends Distributions Forn'l 1099-DIV $ 26,000.00 2a Total capital gain 2b Unrecap. Sec. 1250 distr. gain \f\f\f\fFor Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 113208 Form 1041] [2022] Form 1040 (2022) Page 2 Tax and 16 Tax {see instructions). Check if any from Form{s): 1 :I 8814 2 :I 4972 3 :I _ . . 16 :l Credits 12' Amount from Schedule 2, line 3 ........................................ 1? 18 Add lines 16 and 17 ................................................ 18 :l 19 Child tax credit or credit for other dependents from Schedule 8812. . . . 19 20 Amount from Schedule 3, line 8 ........................................ 2|] 21 Add lines 19 and 20 ................................................. 21 22 Subtract line 21 from line 18. If zero or less, enter -0- ......................... 22 l:] 23 Other taxes, including selfsemployment tax, from Schedule 2r line 21 .............. 23 24 Add lines 22 and 23. This is your total tax ............................... I- 24 :] Federal income tax withheld from: ...................................... Payments 25 a Formiis) W-2 ................................... 25a 25b lJ Formis) 1099 .................................. c Other forms (see instructions] ...................... d Add lines 25a through 25: ................................. . . . . ....... If you have a 26 2022 estlmated tax payments and amount applied from 2021 return . . . ........... qualifying Child. 27 Earned income credit (EIC) ......................... attach Sch. EIC. 28 Additional child tax credit from Schedule 8812 .................. 29 American opportunity credit from Form 8863, line 8 ........ 30 Reserved for future use ................ 31 Amount from Schedule 3, line 15 ..................... 32 Add lines 2?, 28, 29 and 31. These are your total other payments and refundable credits . . b- 32 33 Add lines 25d, 26, and 32. These are your total payments ................... >- 33 UH REflll'ld 34 If line 33 is more than line 24, subtract line 24 from line 33. This is the amount you overpaid . . . . 34 \fSchedule 1 Complete the Long's Schedule 1. SCHEDULE 1 (Form 1040) Department of the Treasury Internal Reyenue Service Nametjs) shown on Form 1040, 104D-SR, or HMONR Russell and Linda Long Additional Income and Adjustments to Income D Attach to Form 1040, ld-SR, or 104D-HR. Iv Go to www.irs.govaorm104 for instructions and the latest information. OMB No. 1545-00?4 2022 Attachment Sequence No. 01 Your social security number 654438-56\"? Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes ............................... 2a Alimony receiyed ..... I] Date of original divorce or separation agreement {see instructions) I'- 3 Business income or (loss). Attach Schedule C .............................................. 4 Other gains or (losses). Attach Form 4797 ................................................ 5 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E ............... 6 Farm income or{loss). Attach Schedule F ................................................. If Unemployment compensation ......................................................... 8 Other income: a Net operating loss ............................................. l] Gambling income .............................................. c Cancellation of debt ............................................ d Foreign earned income exclusion from Form 2555 ....................... e Income from Form 3853 ........................... f Income from Form 3889 .................................. 9 Alaska Permanent Fund dividends ............................... h Jury duty pay ........ II Jul)' uuly pay .............................................. m- i Prizes and awards ....................................... 8i i Activity not engaged in for prot income .............................. 8i k Stock options .......................................... 8k | Income from the rental of personal property if you engaged in the rental for prot but were not in the business of renting such property ..................... 8| m Olympic and Paralympic medals and USOC prize money {see instructions) ...... 8m [1 Section 951(a) inclusion (see instructions) ............................ 8n 0 Section 951A[a) inclusion [see instructions) ........................... 80 p Section 461(I) excess business loss adjustment ......................... 3P I3i Taxable distributions from an ABLE account [see instructions) ............... 3t] r Scholarship and fellowship grants not reported on Form W2 ............... 8r 5 Nontaxable amount of Medicaid waiver payments included on Form 1040, line 1a or 85 ( 1d ................... t Pension or annuityr from a nonqualifed deferred compensation plan or a St nongovernmental section 45? plan ............ u Wages earned while incarcerated . . . . . . . . . . . .. Bu 2 Other income. List type and amount: II- 82 9 Total other income. Add lines 8a through 82 ............................................... 9 1!) Combine lines 1 through I" and 9. Enter here and on Form 1040, 1040SR, or 1040NR. line 8 ........... 10 I: For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. ?14?9F Schedule 1 (Form 1040) 2022 Schedule B Complete the Longs' Schedule B. SCHEDULEB (Form 1040) Department of the Treasury Internal Revenue Service Interest and Ordinary Dividends Name(s) shown on return Russell and Linda Long D Go to www.irs.gov/Schedul'e3 ior inslruclions and the latest iniormation. b Attach to Form 1040 or 1040-SR. OMB No. 1545003\" 2022 Atta chm ent Sequence No. 08 Your social security number 66498 5 678 Part I Interest (See instructions and the instructions for Forms 1040 and 1040SR, line 2b.) Note: If you received a Form 1099INT, Form 1099OID, or substitute statement from a brokerage rm, list the rm's name as the payer and enter the total interest shown on that form. Part II n-.l: .._.... 1 List name of payer. If any interest is from a sellerfinanced mortgage and the buyer used the property as a personal residence, see the instructions and list this interest rst. Also, show.I that buyer's social security number and address P 2 Add the amounts on line 1 ....................................... 3 Excludable interest on series EE and I U.S. savings bonds issued after 1989. Attach Form 8815 ............................................. 4 Subtract line 3 from line 2. Enter the result here and on Form 1040 or 1040SR, line 2b ................................................... P Note: If line 4 is over $1,500, you must complete Part III. 5 List name of payer P _____________________________ v Amount Amount Ordinary _m _________________________________________________________________________ Dividends ____________________________________________________________________________________________________ (See instructions and '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' the instructions for Forms 1040 and HMOSR, line 3b.) Note: If you received a Form 10'39D1'uII 0r """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" substitute statement ..................................................................................................... from a brokerage rm, list the rm's name as the payer ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' and enter the ordinary dividends 6 Add the amounts on line 5. Enter the total here and on Form 1040 and 1040SR, line 3b ................................................. l- 6 E shown on that form. Note: If line 6 is over $1,500, you must complete Part III. Part III You must complete this part if you (a) had over $1,500 of taxable interest or ordinary dividends; (b) had a foreign account; or (c) received a distribution from, or were a grantor of, or a transferor to, a foreign Foreign trust. Accounts and Trusts 3"a At any time during 2022, did you have a nancial interest in or signature authority over a nancial account {such as a bank account. securities account. or brokerage account) located in a foreign country? See instructions .............................................. Caution: If required, failure to le FinCEN Form 114 may result If \"Yes," are you required to le FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FEAR), to report that nancial interest or signature authority? See FinCEN Form 114 and its in substantial instructions for ling requirements and exceptions to those requirements ........... penalties. See b If you are required to le FinCEN Form 114. enter the name of the foreign country where the instructions. nancial account is located I 8 During 2022. did you receive a distribution from, or were you the grantor of, or transferor to, a foreign trust? If "Yes," you may have to le Form 3520. See instructions . . . . . . . . . For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 1?146N Schedule B (Form 1040) 2022 Schedule C Complete Russell Longs' Schedule C. OMB No. 1545003\" 2022 Attachment Sequence No. I19 SCHEDULE C (Form 1040) Profit or Loss From Business (Sole Proprietorship) D Go to wwarsgov/Schedul'ec for instructions and the latest information. i Attach to Form 1040,. loam-SR, ld-NR, or 1041; partnerships must generally file Form 1065. Department of the Treasury Internal Revenue Service Name of proprietor Social security number (SSN) Russell Long 664-9856?8 A Principal business or profession, including product or service (see instructions) B Enter code from instructions Landscaping h 561360 C Business name. If no separate business name, leave blank. D Employer ID number (EIN) (see instr.) Lawns and Landscapes Unlimited 321-456789 E Business address (including suite or room no.) r 1234 Cherryr Lane City, town or post ofce, state, and ZIP code Nampa,ID8368? ------------------------------------------------------------------------- F Accounting method: (1):: Cash [2) :I Accrual (3) 3 Other {specify} l G Did you "materiallyr participate" in the operation of this business during 2022? If "No," see instructions for limit on I: Yes 3 No losses H If you started or acquired this business during 2022, check here ............................. P :I I Did you make any payments in 2022 that would require you to le Form{s) 1099? [see instructions] . . . I: Yes :I No J If "Yes,\" did you or will you le required Forms 1099? .......................................... I: Yes :I No Income 1 Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W2 and the "Statutory employee" box on that form was checked ............... p :l l l: 2 Returns and allowances ....................................................... 2 3 Subtract line 2 from line 1 ....................................................... 3 l: 4 Cost of goods sold {from line 42) ................................................. 4 5 Gross profit. Subtract line 4 from line 3 ........................................... 5 l: 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions] ....... 1' Gross income. Add lines 5 and 6 .............................................. Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising ............... 8 18 Ofce expense {see instructions) . . . . 18 9 Car and truck expenses (see 19 Pension and protsharing plans . . . . 19 instructions] ............. 9 20 Rent or lease {see instructions): ..... - 1|] Commissions and fees ..... 10 a Vehicles, machinery, and equipment 20a 11 Contract labor (see instructions] 11 b Other business property ......... 20b 12 Depletion ............... 12 21 Repairs and maintenance ......... 21 13 Depreciation and section 1?9 22 Supplies (not included in Part III) . . . 22 expense deduction [not included 23 Taxes and licenses ............ 23 in Part 111) [see instructions) . . . 13 24 Travel and meals: ............ - 14 Employee benet programs a Travel .................... 24a (other than on line 19) ...... 14 b Deductible meals {see 15 Insurance [other than health} . . 15 instructions) ................ 24b 16 Interest [see instructions}: 25 Utilities ................. 25 a Mortgage [paid to banks, etc.) .. 16a 26 Wages {less employment credits}. . . . 26 b Other .................. 16b 27a Other expenses {from line 48] ..... 22a 1? Legal and professional services 1? b Reserved for future use ....... 22b 28 Total expenses before expenses for business use of home. Add lines El through 22a ............ I 28 29 Tentative prot or (loss). Subtract line 28 from line I" ................................... 29 3|] Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplied method. See instructions. Simplified memd filers only: Enter the total square footage of (a) your home: and (b) the part of your home used for business: . Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30 ........................................... 3i] ': 31 Net prot or (loss). Subtract line 30 from line 29. - If a profitr enter on both Schedule 1(Form 1040), line 13, and on Schedule SE, line 2. E 31 [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 3 and on Schedule SE, 32:: :I All investment is at line 2. (If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on Form risk. 10-11, line 3. 32b 3 Some investment is - If you checked 32b, you must attach Form 6198. Your loss may be limited. not at risk. For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P Schedule C (Form 1040) 2022 Schedule C [Form 1040) 2022 Russell Long 6649856?8 Page 2 IEIHI Cost of Goods Sold {see instructions) 33 34 35 36 3? 38 39 40 41 42 Method{s] used to value closing inventory: a 3 Cost b :| Lower of cost or market c 3 Other [attach explanation) Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes," attach explanation ....................................................... :I Yes :I No Inventory at beginning of year. If different from last year's closing inventory, attach explanation ....... 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 ....................................................... Inventory at end of year ....................................................... 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 l'n lo Enrm d'i? Fnr l'l'iic hllc'inac'c Can H10 incl'rllri'innc Fnr lino 'l '1 i'n Finrl nlli' i'F \ nll mllci' Filo L'nrm d'} m Infon'nalion on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to le Form 4562 for this business. See the instructions for line 13 to nd out if you must le Form 4562. 43 when did you place your vehicle in service for business purposes? [mmlddp'yy) I :L 44 Of the total number of miles you drove your vehicle during 2022, enter the number of miles you used your vehicle for: a Business E b Commuting (see instructions) E c Other E 45 Was your vehicle available for personal use during offduty hours? ............................... Yes El No El 46 Do you [or your spouse) have another vehicle available for personal use? ........................... cu Yes El No 4J'a Do you have evidence to support your deduction? ........................................... El Yes El No El b If "Yes,\" is the evidence written? ......................................................... Yes El No Ian Other Expenses. lJ'st below.I business expenses not included on lines 826 or line 30. Business gifts Clothlng and safety shoes Subscriptions Tele ph on e Trainin 9 Other 48 Totalother expenses. Enter here and on line 2?a .................................... H mm Schedule C (Form 1040) 21122 Form 8329 Complete the Longs' Form 3829. OMB No. 1545-0074 For... 8829 Expenses for Business Use of Your Home 2022 Attachment Department of the b File only with Schedule C (Form 1040]. Use a separate Form 8829 for each home you Treasury Internal used for business during the year. Revenue Service D Go to www.irs.gov/Form8829 for instructions and the latest information. Sequence \"0' 176 Name(s) of proprietor{s) Your social security number Russell Long 66498-5678 Part I Part of Your Home Used for Business Lawns and Landscapes 1 Area used regularly and exclusively for business, regularly for daycare, or for storage of inventory or product samples {see instructions) ........................................................ 2 Total area of home ............................................................ mi 3 Divide line 1 by line 2. Enter the result as a percentage .................................. \"A: For daycare facilities not used exclusively for business, go to line 4. All others, go to line 7. 4 Multiply days used for daycare during year by hours used per day ........ 4 hr. 5 If you started or stopped using your home for daycare during the year, see instructions; othemise, enter 8,760 6 Divide line 4 by line 5. Enter the result as a decimal amount ............ ? Business percentage. For daycare facilities not used exclusively for business, multiply line 6 by line 3 [enter the result as a percentage). All others, enter the amount from line 3 ..................... y % Part I] Figure Your Allowable Deduction M i" 8 Enter the amount from Schedule C, line 29, plus any gain derived from the business use ofyour home, minus any loss from the trade or business not derived from the business use of your home. See instructions. See instructions for columns (a) and (b) before . (b) Indirect _ _ (a) Direct expenses completlng lInes 922. expenses 9 Casualty losses {see instructions) ................. n-_ 10 Deductible mortgage interest {see instructions} ...... - 11 12 13 14 15 16 1? 18 19 2|] 21 22 23 24 25 26 2? 28 29 3|] 31 32 33 34 35 Real estate taxes (see instructions) ............... 13 Add lines 9, 10, and 11 ....................... 12 Multiply line 12, column (b), by line 7 ............................. Add line 12r column (a), and line 13 ...................................... . .. Subtract line 14 from line 8. If zero or lessI enter 0 .......................... Excess mortgage interest {see instructions) ........ 16 Excess real estate taxes {see instructions) ........ 1? Insurance ................................ 18 Rent .................................... 19 :1 Repairs and maintenance .................... 2|} Utilities ................................. 21 C] Other expenses [see instructions) ............ 22 Add lines 16 through 22 .................... 23 :] Multiply line 23, column (b), by line 7 ............................. 24 :] Carryoyer of prior year operating expenses [see instructions) ............ 25 Add line 23, column I[a)I line 24, and line 25 .................................... 26 :l Allowable operating expenses. Enter the smaller of line 15 or line 26 ...................... 22 E Limit on excess casualty losses and depreciation. Subtract line 2? from line 15 ................ 28 Excess casualty losses [see instructions) ........................... 29 Depreciation of your home from line 42 below ....................... 3D Carryoyer of prior year excess casualty losses and depreciation (see instructions) 31 Add lines 29 through 31 ................................................... 32 Allowable excess casualty losses and depreciation. Enter the smaller of line 28 or line 32 ............ 33 Add lines 14, 222 and 33 ........................................................ 34 E Casualty loss portion, if any, from lines 14 and 33. CarryI amount to Form 4684 (see instructions) ........ 35 36 Allowable expenses for business use of your home. Subtract line 35 from line 34. Enter here and on Schedule C, line 30. If your home was used for more than one business, see instructions ....... p 35 :] Part III Depreciation of Your Home 3? Enter the smaller of your home's adjusted basis or its fair market value [see instructions) ........... 38 Value of land included on line 3? ........................................... 39 Basis of building. Subtract line 38 from line 3? .................................. 40 Business basis of building. Multiply line 39 by line I" ............................... 41 Depreciation percentage {see instructions) ...................................... 42 Depreciation allowable {see instructions). Multiply line 40 by line 41. Enter here and on line 30 above ..... Carryover of Unallowed Expenses to 2023 43 Operating expenses. Subtract line 22 from line 26. If less than zero, enter 0- ................... .3: Excess casualty losses and depreciation. Subtract line 33 from line 32. If less than zero, enter -0- ..... For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 13232M FonTI 8829 (2022) Qualied Dividends and Capital Gain Tax Worksheet Complete the Russell's Qualified Dividends and Capital Gain Tax Worksheet. Russell Long Qualied Dividends and Capital Gain Tax WorksheetLine 16 Before you begin: J See the earlier instructions for line 16 to see if you can use this worksheet to gure your tax. J Before completing this worksheet. complete Form 1040 or lD4USR through line 15. J If you don't have to le Schedule D and you received capital gain distributions, be sure you checked the box on Form 1040 or lEl4DSR, line 2. 1. Enter the amount from Form 1040 or lO4EI-SR, line 15. However, if you are ling Form 2555 [relating to foreign earned income), enter the amount from line 3 ofthe Foreign Earned Income Tax Worksheet ....................................... 1. :l 2. Enter the amount from Form 1040 or 1040SR, line 3a' . . .. 2_ E \f14. 15. 16. 1?. 18. 19. 2|]. 21. 22. 23. 24. 25. * If you are iing Form 2555, see the footnote in the Foreign Earned Income Tax Worksheet before compieting tnis iine. Enter the smaller of line 1 or line 13 .................................. 14_ : Add lines 5 and 9 .............................................. 15. : Subtract line 15 from line 14. If zero or less, enter 0 ..................... 16. :i Enter the smaller of line 12 or line 16 ................................. 1?. : Multiply line 1? by 15% {0.15) ......................................................... Add lines 9 and 1? ............................................. 19. : Subtract line 19 from line 10 ....................................... 2|]. : Multiply line 20 by 20% {0.20) ......................................................... Figure Hie tax on Hie amount on line 5. Ifthe amount on line 5 is less than $100,000, use the Tax Table to gure the tax. If Hie amount on line 5 is $100,000 or more, use Hie Tax Computation Worksheet .......... Add lines 18, 21, and 22 ............................................................... Figure Hie tax on Hie amount on line 1. Ifthe amount on line 1 is less than $100,000, use the Tax Table to gure the tax. If Hie amount on line 1 is $100,000 or more, use Hie Tax Computation Worksheet ........ Tax on all taxable income. Enter the smaller of line 23 or 24. Also include this amount on Hie entry space on Form 1040 or 1040SR, line 16. If you are ling Four: 2555, don't enter this amount on the entry space on Form 1040 or 1040SR, line 16. Instead, enter it on line 4 of the Foreign Earned Income Tax Worksheet . . . . 18. 21. 22. 23. 24. 25. \f