Question

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:

Income Statement
Scott Butterfield, CPA Income Statement 12/31/2019
	Current Period			Prior Period
	1/1/2019 to 12/31/2019			1/1/2018 to 12/31/2018
REVENUES
Tax Services	$221,200			$72,154
Accounting Services	22,120			50,256
Other Consulting Services	48,664			7,690
TOTAL REVENUES	291,984			130,100
COST OF SERVICES
Salaries	44,240			29,400
Payroll Taxes	2,387			2,275
Supplies	300			1,225
TOTAL COST OF SERVICES	46,927			32,900
GROSS PROFIT (LOSS)	245,057			97,200
OPERATING EXPENSES
Advertising and Promotion	2,000			–
Business Licenses and Permits	620			250
Charitable Contributions	450			250
Continuing Education	1,500			–
Dues and Subscriptions	1,640			3,500
Insurance	13,272			870
Meals and Entertainment	9,954			5,400
Office Expense	4,424			–
Postage and Delivery	85			–
Printing and Reproduction	2,212			–
Office Rent	6,636			13,800
Travel	8,848			750
Utilities	2,654			2,724
TOTAL OPERATING EXPENSES	54,245			27,544
NET INCOME (LOSS)	$190,812			$69,656

Scott also mentioned the following:

• The expenses for dues and subscriptions were his country club membership dues for the year.
• Of the charitable contributions, $50 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, 2016 and drove it 5,340 miles for business, 3,204 miles for commuting, and 6,408 miles for nonbusiness purposes. His wife has a car for personal use.

Complete Schedule C for Scott showing Scott's net taxable profit from self-employment. 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.

Answer 1

Name of proprietor		Social security number (SSN)
Scott Butterfield		644-47-7833
Principal business or profession, including product or service (see instructions)
Business name. If no separate business name, leave blank
Business address (including suite or room no.) ▶ City, town or post office, state, and ZIP code
678 Third Street, Riverside, CA 92860
Accounting method:	Cash
Did you “materially participate” in the operation of this business during 2019? If “No,” see instructions for limit on losses
If you started or acquired this business during 2019, check here
Did you make any payments in 2019 that would require you to file Form(s) 1099? (see instructions)
If “Yes,” did you or will you file required Forms 1099? .
Gross receipts or sales.	291984
Returns and allowances	0
Subtract line 2 from line 1	291984
Cost of goods sold (from line 42)	46927
Gross profit. Subtract line 4 from line 3	245057
Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) .	0
Gross income. Add lines 5 and 6 .	245057
		Office expense (see instructions)	4509
Advertising	2000	Pension and profit-sharing plans
Car and truck expenses (see instructions)		Rent or lease (see instructions):	6636
Commissions and fees		Vehicles, machinery, and equipment
Contract labor (see instructions)		Other business property .
Depletion		Repairs and maintenance
Depreciation and section 179 expense deduction (not included in Part III)		Supplies (not included in Part III) .
Employee benefit programs (other than on line 19)		Taxes and licenses	620
Insurance (other than health)	13272	Travel and meals:
Interest (see instructions):		Travel .	8848
Mortgage (paid to banks, etc.)		Deductible meals (see instructions)	4977
Other		Utilities	2654
Legal and professional services		Wages (less employment credits) .
		Other expenses (from line 48	2212
		Reserved for future use
Total expenses before expenses for business use of home. Add lines 8 through 27a			45728
Tentative profit or (loss). Subtract line 28 from line 7 .			199329
Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions).			0
Net profit or (loss). Subtract line 30 from line 29.			199329
Cost of Goods Sold (
Method(s) used to value closing inventory	NA
Was there any change in determining quantities, costs, or valuations	No
Purchases less cost of items withdrawn for personal use	0
Cost of labor. Do not include any amounts paid to yourself .	46627
Materials and supplies	300
Other costs . .
Add lines 35 through 39	46927
Inventory at end of year	0
Cost of goods sold.	46927
Information on Your Vehicle.
When did you place your vehicle in service for business purposes? (month, day, year	01-01-2016
Of the total number of miles you drove your vehicle during 2019, enter the number of miles you used your vehicle for:
Business 5340; commuting 3204; personal 6408
Was your vehicle available for personal use during off-duty hours? .	Yes
Do you (or your spouse) have another vehicle available for personal use?.	Yes
Do you have evidence to support your deduction?	Yes
Other Expenses. List below business expenses not included on lines 8–26 or line 30.
Country club membership non-deductible	1640
Meals are deducted at 50% of cost i.e. standard to avoud adding up entertainment costs	4977
Charitable contributions are not expenses they are deductions	450
Continuing education is not an expense but person can claim credit under life time learning credit	1500