Analize the following accounting event, identify a tax issue, and write a brief conclusion:

David R. and Sheri N. Johnson (ages 45 and 46) are married and live atXXXXX Casper, WY 82609. David is a consulting engineer, while Sheri is a paralegal. They file a joint

return and use the cash basis for tax purposes. 1. Trained as a mining engineer, David has developed considerable expertise in the treatment and disposition of waste material. He also is well versed in the federal and state requirements for land reclamation projects. David maintains a consulting practice through which he advises clients on these matters. David