Appendix E South-Western Federal Taxation 40e

PROBLEM 1 David R. and Sheri N. Johnson Gages 45 and 46) are married and live at 641 Cody Way, 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 is also 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's business activity code is 541990. Most of his clients are small and medium-size mine owner/ operators located in Wyoming and contiguous states (e.g., Montana, Idaho, Utah. Usually, David is retained by a client on a contract fee basis and is reimbursed for all out-of-pocket expenses. In performing his services, David usually visits the job site and later submits his recommendations in a written report along with a state ment for his services and expenses. David received the following amounts from his consulting business in 2015: 92,800 Fees for services rendered Expense reimbursements: Airfare $8,200 Meals 6,100 5,200 Lodging Transportation (taxis, airport limos, car rentals 920 Subtotal for expense reimbursement 20,420 Total received S1 13.220