Christopher Crosphit (age 42) owns and operates a health club called Catawba Fit
ID: 2331365 • Letter: C
Question
Christopher Crosphit (age 42) 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. Chris had the following income and expenses from the health club: Income $216,100 Expenses: Business insurance 3,665 Office supplies 3,295 Payroll 98,900 Payroll taxes 9,112 Travel 2,420 Equipment & club maintenance 10,720 Cleaning service 8,775 Equipment rent 22,820 Telephone 2,778 Utilities (electric, water, gas) 13,975 Rent 32,590 Advertising 5,200 Special workout clothing and boxing gloves 780 Subscription to Biceps Monthly magazine 120 Educational seminar on weight training 770 Other expenses 1,830 The business uses the cash method of accounting and has no accounts receivable or inventory held for resale. Chris has the following interest income for the year: Upper Piedmont Savings Bank savings account $12,831 and Morgan Bank bond portfolio interest 12,025 Chris has been a widower for 10 years with a dependent son, Arnold (Social Security number 276-23-3954), and he files his tax return as head of household. Arnold is an 18-year-old high school student; he does not qualify for the child tax credit. They 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 his home. The room is 171 square feet and the house has a total of 1,800 square feet. Chris pays $20,000 per year in rent and $4,000 in utilities. Chris' Social Security number is 565-12-6789. He made an estimated tax payment to the IRS of $1,000 on April 15, 2017. Required: Complete Chris' federal tax return for 2017. Use Form 1040, Schedule B, Schedule C, and Form 8829 to complete this tax return. Do not complete Form 4562 (depreciation). Make realistic assumptions about any missing data. Need to complete the following: form 1040, schedule C, schedule B, and form 8829.
Explanation / Answer
ANSWER
For the year Jan. 1--Dec. 31, 2016, or other tax year beginning ,2016, ending See separate instructions. Your first name and initial Christopher Last name Crosphit Your social security number 000-02-9303 Filing Status 1 X Single CHECK ONE BOX ( Use 'X' ) 4 X Head of household (with qualifying person). (See instructions.) If 0 No. of childrenon 6c who: Exemptions b Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Dependents: (2) Dependent's (3) Dependent's (4) if child under age 17 • lived with you social security relationship to qualifying for child tax credit • did not live with If more than four (1) First name Last name number you (see instructions) you due to divorce
or separation
(see instructions) dependents, see Arnold 276-23-3954 0 instructions and 0 Income 7 Wages, salaries, tips, etc. Attach Form(s) W-2 . . . . . . . . . 7 0 8 a Taxable interest. Attach Schedule B if required. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8a 23,856 Attach Form(s) b Tax-exempt interest. Do not include on line 8a . . . . . . . . . 8b W-2 here. Also 9 a Ordinary dividends. Attach Schedule B if required. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9a 0 attach Forms b Qualified dividends . . . . . . . . . . . . . . . . . . . . . . 9b W-2G and 10 Taxable refunds, credits, or offsets of state and local income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 1099-R if tax 11 Alimony received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 was withheld. 12 Business income or (loss). Attach Schedule C or C-EZ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 213,800 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here. #### 13 0 If you did not 14 Other gains or (losses). Attach Form 4797. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 get a W-2, 15 a IRA distributions 15a 0 b Taxable amount . . . . . . . 15b 0 see instructions. 16 a Pensions and annuities 16a 0 b Taxable amount . . . . . . . 16b 0 ## 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E. 17 0 18 Farm income or (loss). Attach Schedule F. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 0 19 Unemployment compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 20 a Social security benefits 20a 0 b Taxable amount . . . . . . . 20b 0 21 Other income. List type and amount. 21 0 22 Combine the amounts in the far right column for lines 7 through 21. This is your total income 22 237,656 23 Educator expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Adjusted 24 Certain business expenses of reservists, performing artists, and
fee-basis government officials. Attach Form 2106 or 2106-EZ 24 115,321 Gross 25 Health savings account deduction. Attach Form 8889 . . . . . . . . . . 25 3,775 Income 26 Moving expenses. Attach Form 3903 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 27 Deductible part of self-employment tax. Attach Schedule SE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 9,210
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