Bob and Mary Smith, a married couple, engaged you to prepare their 2018 individual income tax return. Their address is 123 Main Street, Wilmore, KY. Their social security numbers and dates of birth are as follows: S. S. No. Date of Birth Bob 123-45-6789 December 1, 1955 Mary 098-76-5432 May 5, 1957 They provide you with the following income and expense information for 2018: Bob is a CPA and his salary was $150,000. He had $17,500 in federal income taxes withheld, $6,500 in state income taxes withheld, and $3,500 in local income taxes withheld. Mary retired in August of 2018 and began receiving $1,200 per month from a pension. Marys cost in the pension is $100,000. Bob and Mary also have rental property. The net rental income for the year is $25,000. (Do not prepare schedule E for this tax return.) During 2018, they received $150 in interest on their savings account and $250 from a tax-exempt municipal bond. They received $2,500 in ordinary dividends. Bob paid $1,000 per month in alimony from a divorce that was settled in 2012. The recipients social security number is 765-89-1234. They have the following medical expenses for the year: o Prescription drugs - $150 o Doctor visit copays - $250 o Physical therapy for an injury - $200 o New eyeglasses for Mary - $50 o Dental work - $150 They paid $1,500 with their 2017 Kentucky individual income tax return. They filed the return and made the payment in 2018. Bob and Mary paid $3,500 in real estate property taxes on their home and $550 in property taxes on their vehicles. The outstanding mortgage on their home is $350,000. Bob and Mary also paid $2,500 in real estate property taxes for a vacation home in Oregon. The outstanding mortgage on the vacation home is $250,000. The mortgage interest paid on the primary residence during 2018 was $2,575. The mortgage interest paid on the vacation home during 2018 was $1,550. They paid $250 in credit card interest during 2018. They provide you with the following list of charitable contributions made during the year: o $5,000 to their church o $1,500 to The Salvation Army o $500 to Asbury University o $250 to the local humane society Bob provides volunteer service as a CPA to their church. He claims he provided 100 hours in volunteer service during the year. His billing rate is $150 per hour. Bob and Mary also sold stock during the year. They provide you with the following stock sale information. They also have a $1,500 short-term capital loss carryforward and $2,000 long-term capital loss carryforward from 2017. ABC, Inc. was original purchased on January 31, 2018, for $5,000. It was sold on December 15, 2018, for $2,500. XYZ, Inc. was also sold on December 15, 2018. It was sold for $3,500 and originally purchased on January 15, 2018, for $5,000. The following stock were sold on December 1, 2018: o DEF, Inc. sold for $5,000. Originally purchased on February 2, 2012 for $3,575. o UVW, Inc. sold for $6,500. Originally purchased on July 5, 2016 for $2,525. o GHI, Inc. sold for $4,500. Originally purchased on May 1, 2015 for $2,500.

Required: Using the above information, prepare Bob and Marys 2018 federal individual income tax return. Include all necessary schedules, forms, and worksheets.