Daniel B Butler and Freida C. Butler, husband and wife, file a joint return. The butlers live at 625 Oak Street in Corbin, KY 40701. Dans Social Security number is 111111112, and Freidas is 123456789. Dan was born on January 15, 1966, and Freida was born on August 20, 1967. During 2017, Dan and Freida furnished over half of the total support of each of the following individuals, all of whom still live at home.

a) Gina, their daughter, age 22, a fulltime college student, has no income of her own. Ginas Social Security number is 123456788.

b) Sam, their son, age 20, who had gross income of $6,300 in 2017. He graduated from high school on May 15th 2017, Started College on August 21st 2017, then dropped out of college in September 2017. Sams Social Security number is 123456787.

c) Ben, their oldest son, age 26, is a fulltime graduate student with gross income of $5,200. Bens Social Security number is 123456786.

Dan was employed as a manager by WJJJ, Inc. (employer identification number 11 1111111, 604 Franklin street, Corbin, KY 40702), and Freida was employed as a salesperson for Corbin Realty, Inc. (employer identification number 987654321, 899 Central Street, Corbin, KY 40701).

Selected information from the W2 Forms provided by the employers is presented below. Dan and Freida use the cash method.

Line Description Dan Freida 1 Wages, tips, other compensation $71,000 $81,000

2 Federal income tax withheld 11,000 11,400

17 State income tax withheld 2,560 3,040

Freida sold a house (as part of her job as a real estate agent) on December 30, 2017, and will be paid a commission of $3,100 (not included in the $81,000 reported on the W2) on the January 10, 2018 closing date.

Before marrying Freida, Dan was married and divorced to Sarah. Dan and Sarah have a daughter together; Sarah has custody of this child and claims her as a dependent. Under the divorce agreement, Dan is to pay Sarah $500 per month in alimony and $200 in child support ($700 in total per month). Dan timely made his $700 payment to Sarah each month, except for December. Dans December payment was late, and paid in January of 2018.

The Butlers also had: (1) $1,600 in interest income from their savings account (2) Sale of ABC stock on 8/15/2017 for $10,000 (originally purchased for $4,000 on 1/15/2013) (3) Sale of XYZ stock on 10/15/2017 for $3,000 (originally purchased for $4,000 on 12/15/2016) (4) Sale of a boat on 5/15/2017 for $10,000 used for personal recreation (originally purchased for $20,000 on 6/15/2012) (5) Interest on the Butlers personal residence is $4,000 (Assume this is tax deductible) (6) The Butlers paid $2,400 in property taxes on their primary residence (7) The Butlers made a $3,000 cash contribution to a qualified charitable organization Prepare the 2017 Federal income tax return for the Butlers. Next, recalculate this return as if it was a 2018 tax return.