David R. and Sheri N. Johnson (ages 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.

A) Trained as a mining engineer, David has become an expert in the treatment and disposition of waste material. He also is well-versed in the Federal and stste requirements for land reclamation projects. David maintaines 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-sized mine owner/operators located in Wyoming and contiguous states (e.g. Montana, Idaho, Utah). David is retained by a client on a contract fee basis and is reimbursed for all out of pocket expenses. In preforming his services, David usually visits the job and later submits his recomindations. In a written report along with a statement for his services. David recieved the following amounts from his business in 2015: Fees for services rendered ($92,800), reimburstments: airfare ($8,200), meals ($6,100), lodging ($5,200), transportation ($920). The subtotal for expense reimburstments was $20,420. His total recieved was $113,220

B) The following fees for rendered services aren't included in the recipts listed above: a) Echo Mining: Payment recieved January 2016: work done December of 2015($5,100). b) Sesa Mining: Payment recieved January 2015; work done December 2014 ($4,400). c) Cormorant Mining: No payment recieved: work done March 2015 ($3,700). David didn't incur any travel expenses, all of his work was done from his office. Cormorant Mine is in bankrupcy, so David doesn't expect to be able to collect any of their fee.

C) Other expenses paid by David in 2015 relating to his practiceare as follows: a) Contribution to Keogh retirement plan ($9,000) b) Premiums on medical insurance; covers self, spouse, and dependans ($3,800). c) Landscape models purchased from topographer for reclamation projects ($3,200). d) Advertising in trade journals ($2,400). e) Office supplies ($1,200). f) Business phone and internet service ($860). State occupation license ($300). Subscriptions to trade journals ($240). Membership dues to trade associations ($180).

D) David operates his consulting business out of an office in his home. Twenty percent of the 3,000-square-foot living area is devoted to the office. David inherited the home on Cody Way from his father, who died on 06/06/2006, when it had a fair market value of $400,000 ($40,000 of that is allocated to the land). The Johnsons moved into the home in 2006, and David began using his hoe office in the same year. The homes current fair markt value is $500,000 ($50,000 allocated to the land). Davids father origonally bought the land for $6,000 in 1969. He built the house for $60,000 in 1973. David depreciates the business use of his home using MACRS, treating the home as a 39-year nonresidential reality. Additional info regarding the property for 2015: Utilities ($4,800), Repaires and maintenance ($2,900), Property/casualty insurance ($2,300).

E) The property taxes and morgage interest paid in 2015 on the home is listed in item O below. In addition to the repaires and maintenance noted above, David had the office repainted ($1,200). The furniture in the office, including business equipment, was properly expensed during the year and bought a zero basis. However, On 03/05/2015, David purchased a heavt duty, fire resistant cabinet with security-vault features for $4,800. He made the purchase to safeguard and maintain privacy of client data. If possible,David prefers to avoid capitalizing and depreciating the cabinet.

F) Sheri is a liscened paralegal and is employed an a part-time basis by several local attorneys. She commuted to work using the family Suburban for a total of 813 miles and paid parking fees of $310. Her earnings and job related expenses are as follows:

Salary (from 4 employers)	$38,000
Laptop	$1,200
Subscriptions and dues to professional organizations	$180
Continuing education correspondance course	$120
Occupational license fee	$80

Sheri purchased the laptop on 03/12/15 and uses it for business 80% of the time. The correspondance course is required continuing education so she can retain her license. Sheri is considering going to law school, so she attended a series of LSAT preperation sessions at a cost of $350. Because Sheri is a part-time employee, she is not covered by any of her employeers' medical or retirement plans. Sheri is covered under David's insurance, and during 2015, she contributed $5,000 to a traditional IRA that she established several years ago. The Johnsons use the automatic mileage meathod to calculate any tax deductions they are entitled to for the use of the Suburban.

G) With funds funds recieved from the settlement of his father's estate, David purchased a rental property at 4620 Cottonwood Lane, Casper WY 82609. Of the @250,000 purchase price, $30,000 was allocated to the land. After an $80,000 renovation to the house, the property was rented begining 02/01/2009. In 2013, the Johnsons decided their investment would be more marketable if the house was rented as furnished. Consenquently, it cost them $38,000 for the furniture. Under the current lease agreement, the property rents for $2,200 am month (payable at the beginning of each month) without including utilities. Information regarding the property is below:

Rent Recieved	$28,600
Property/casualty insurance premium paid	$3,100
Property taxes paid	$2,400
Yard maintenance paid	$1,200
Repairs	$800

The rent recieved includes $2,200 for January 2016, the tennates payed in mid-December. In addition to property taxes, Dave paid a special tax assesment of $2,400 to the City of Casper for repaiving the street in front of the property. The Johnsons use MACRS to depreciate the rental home and the furnishings within it (assume half-year convention for the personalty).

H) The Johnsons acquired 1,000 shares of common stock in Common Mining on 03/07/2014, to hold for investment purposes. David preformed services for the company in late 2013, submitting a bill for $3,900. Because Cormorant was experiencing cash-flow problems at the time, David accepthed the stock as payment for his services. Now Cormant is bankrupt and expectations are that the shareholders will not recover anything. The stock is not publicly traded.

I) On March 10, 1997, Davids father gave the Johnsons a plot of land located in Teton County as an anniversiary present. It had a value of $150,000 at the time of the gift (no gift tax on transfer). David's father purchased the land on 06/01/1987, for $50,000. In December 2014, a real estate developer contacted the Johnsons and offered $800,000 for the property. After some negotation, the following transaction took place on 03/04/2015: The Johnsons transferred the Teton plot in return for $8,000 in cash and 4 city lots in Laramie (WY) Worth $792,000. The Johnsons considered it a good invertment because of its location. All closing costs and legal fees were absorbed by the real estate developer.

J) On July 12, 2001 using $50,000 in funds she recieved from her aunt's life insurance policy, Sheri purchased graizing land in Converse County (WY). On August 2, 2014 she sold the land for $75,000. Under terms of the sale, she recieved a $15,000 down payment and 10 annual notes of $6,000 each. She is also to recieve simple interest of 8% on the outstanding principal balance each year. On August 4, 2015, Sheri collected $10,800 ($6,000 on the note and $4,800 interest) on the maturity of the first note.

K) Although the Johnsons had several scheduele D transactions during 2014, they ended up with a short-term capital loss of $7,000. Of this loss, $3,000 was deductedmin 2014, and $4,000 caried over into 2015.

L) For several years, Sheri's widowed mother, Vivian Olsen, has lived with the Johnsons and has been claimed by them as a dependant. On December 30, 2014, Vivian suffered a heart attack. After six days in the ICU of a loca hospital, Vivian died. In early February of 2015, The Johnsons paid the folowing expenses related to Vivian:

Burial Expenses	$4,400
Medical expenses incurred in 2014	$4,200
Medical expenses incurred in 2015	$3,100
Remainder of church pledge for 2015	$600

Fortunately, the balance of Vivian's medical expenses ($11,900) was covered by insurance. Besides household and personal effects, Vivian's major asset was life insurance. As the designated benificiary of the policy, Sheri recieved $20,000 of death benifits on March 13, 2015.

M) Besides what has already been mentioned, the Johnsons had the following recipts during 2015:

Interest Income:
City of Cheyenne general purpose bonds	$1,900
CD at Wells Fargo Bank	$1,100
Money market account at Bank of America	$400
Yard (garage) sale	$950
Qualified dividends on Meadowlark Corporation common stock	$700
Jury duty fees	$420

The yard sale used furniture, appliances, books, toys, and other household goods having an estimated oriinal cost value of $1,800. In connection with her jury duty assigned in June, Sheri drove the Suburban 40 miles and incurred expenses of $30 for parking and $45 for meals.

N) In addition to items already noted, the Johnsons had the following expenditures for 2015:

Interest on home equity loan used to finance purchase of personal items (eg. camper)	$4,400
Charitable contributions (not counting Vivian's pledge)	$3,200
Ad valorem property taxes on personal residence	$3,100
Medical and dental bills (includin prescription drugs of $400) other than those relating to Vivian	$4,800

The Johnsons drove the Suburban 420 miles to various medical and dental appointments. Wyoming has no state or local income tax but does impose a general sales tax. The county they live in also imposes an additional local sales tax of about 1%. Although they don't keep track of their sales tax, they purchased a camper for $40,000 in May, 2015. The sales tax on this purchase was $1,600.

O) Besides Vivian (see section L), the Johnsons' household includes two daughters, Meredith (19) and Kirby (18), and one son, Toby (17). Kirby and Toby are full-time students in high school. Meredith graduated a year ago and earned $9,000 working a part time in 2015. Se deposited the money into a savings account, hoping to someday attend college.

P) For tax year 2014, the Johnsons had an overpayment of $150, which they applied tward their 2015 income tax. Sheri's income tax witholdings for the year are $5,100, and the Johnsons made Federal quarterly tax payments totaling $16,000 ($4,000 per installment).

Q) Relevant Social Security numbers are noted below:

David Johnson	111-11-1112
Sheri Johnson	123-45-6785
Vivian Olson	123-45-6786
Meredith Johnson	123-45-6787
Kirby Johnson	123-45-6788
Toby Johnson	123-45-6789

Instructions: Prepare an income tax return (with appropriate supporting forms and schedules) for the Johnsons for 2015. In doing this, follow these guidelines:

- Make necessary assumptions for information not given but needed to complete the return

- The taxpayers are preparing their own return (i.e., no preparer is involved)

- The taxpayers have the necessary written substantiation to support the transactions involved

- If any refund is due, apply it toward next year's taxes.

- The Johnsons do not wish to contribute to the Presidential Election Campaign Fund

(All necessary forms posted below. Make necessay assumptions for data not given!! Enough information has been given to make such assumptions)