I just do not know which form those numbers should go in. I would canculate the results myself. Thanks
John and Ellen Brite are married and file a joint return. They have no dependents. John owns an unincorporated specialty electrical lightning retail store, Brite-On. Brite-On had the following assets on January 1, 2012:
Old store building purchased april 1, 1999: $100,000
Equipment (7-year recovery)purchased January 10,2007: $30,000
Inventory valued using FIFO method: 4,000 light bulbs: $5/bulb
Brite-On purchased a competitor's store on March 1, 2012 for $107,000. The purchase price include the following:
New store building: $60,000(FMV)
Land: $18,000(FMV)
Equipment:(5-year recovery): $11,000(FMV)
Inventory: 3,000 lights bulbs: $6/bulb(cost)
On Junes 30,2012, Brite-On sold the 7-year recovery period equipment for $12,000. Brite-On leased a $30,500 car for $500/month beginning on January 1,2012. The car is used 100% for business and was driven 14,000 miles during the year.
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 2011 at a cost of $7/bulb. Brite-On had the following revenues(in addition to the sales of light bulbs) an additional expenses:
Service revenue: $64,000
Interest expense on business loans: $4,000
Auto expenses (gas, oil, etc): $3,800
Taxes and licenses: $3,300
Utilities: $2,800
Salaries: $24,000
John and Ellen also had some personal expenses:
Medical bills: $4,500
Real property taxes: $3,800
State income taxes: $4,000
Home mortgage interest: $5,000
Charitable contributions (cash): $600
The Brites received interest income on a bank savings account of $275. John and Ellen made four $5,000 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.
Additional facts:
-Equipment acquired in 2007: the Brites elected out of bonus depreciation and did not elect Sec. 179
-Equipment acquired in 2012: the Brites elected Sec. 179 to expense the cost of the 5-year equipment but elected out of bonus depreciation
-Lease inclusion rules require that Brite-On reduces its deductible lease expense by $8
Complete their 2012 Form 1040, Schedules A, and SE