Example 4. Steve and Linda Green (Form 1040) Steve and Linda Green have two children, Amy, age 8, and Carol, age10, who lived with them all year. Steve owns and operates a dairy farm that had a loss of $2,000 in1999. Steve reports this loss on Schedule F and on Form 1040, line 18.Steve qualifies and chooses to use the optional method to figure netearnings, so he uses Section B of Schedule SE. He enters $1,600 onlines 15 and 4b of Section B of Schedule SE. Steve figuresself-employment tax of $244. He deducts one-half of it ($122) on line27 (Form 1040). Linda had wages of $15,000, which she reports on Form 1040, line 7.She also received advance EIC payments of $1,140, which she reports onForm 1040, line 54. Steve and Linda had a $1,000 loss from the sale of stock and a$5,000 gain from the sale of dairy cows. They report the $5,000 gainon Form 4797, Sales of Business Property. They do not haveany other sales to report on Form 4797, so they enter $5,000 on line7, column (g), of Form 4797 and on line 11, column (f), of Schedule D.(They have no prior year section 1231 losses.) They report their netcapital gain of $4,000 from Schedule D on Form 1040, line 13. cheapest hotels ArendalThe Greens read Publication 596to see if they can claim the EIC.They use Worksheet 1Hamburg hotels (shown here) to figure theirinvestment income, which is zero. They use Worksheet 3 (notshown) to figure their modified AGI of $18,378. They find that theyare eligible to get the EIC. They use EIC Worksheet Bcheap hotels in Glasgow(shown here) to figure their EIC of $2,570. They also completeSchedule EIC (not shown) and attach it to their Form 1040.    Greens' Worksheet 1: Invesment Income Worksheet Greens' EIC Worksheet B, page 1 Greens' EIC Worksheet B, page 2