Instructions:

Please complete the 2019 federal income tax return for Joseph and Diana Cohen. Ignore the requirement to attach the form(s) W-2 to the front page of the Form 1040. If required information is missing, use reasonable assumptions to fill in the gaps.

Joseph and Diana Cohen live in Pleasantville, New Jersey. Joseph is the Vice-President of Sales at a small start-up company. Diana is a former advertising executive who currently consults with former clients. She also serves on the board of directors of an advertising company. The Cohens have three children Rebecca (age 18), Alan (age 15), and David (age 12). In January, Rebecca left home to attend a liberal arts college. All three children qualify as Joseph and Dianas federal income tax dependents. The Cohens plan to file a joint tax return. The Cohens provided the following information:

Josephs social security number is 598-94-2583

Dianas social security number is 301-52-2942

Rebeccas social security number is 887-44-8710

Alans social security number is 810-42-9092

Davids social security number is 855-11-3021

The Cohens mailing address is 85 North Maple Drive, Pleasantville, New Jersey 08232

Joseph Cohen reported the following information relating to his employment during the year:

Employer	Gross Wages	Federal Income Tax Withholding	State Income Tax Withholding
Alternative Energy	$148,325	$25,230	$8,900

The above amounts do not reflect any income items described below. Josephs employer withheld all payroll taxes it was required to withhold. The entire Cohen family was covered by minimum essential health insurance during each month in 2019. The insurance was provided by Josephs employer, Alternative Energy.

Diana Cohen received the following revenue during the year (she uses the cash method of accounting).

- Consulting revenue reported to her on a Form 1099-MISC, Box 7

High-end Retail $32,000

Jensens Health Products $8,500

Strategic Solutions $3,750

- Board of director compensation reported to her on a Form 1099-MISC, Box 7

Natural Sunshine, Inc. $6,500

In each of these self-employment endeavors, Diana is an active participant, and both activities are considered specified service trades or businesses for purposes of the Qualified Business Income Deduction. Assume both activities qualify as a trade or business.

During the year, Diana paid the following business expenses for each activity:

Consultant-related: Diana drove 290 business miles for her consulting-related activities (she has documentation to verify)

Airfare	$2,900
Hotel	$1,450
Meals	$390
Parking	$320

Board of Director-related: Diana drove 315 business miles for her board of director activities (she has documentation to verify)

Meals	$124
Hotel	$225

Neither of Dianas business activities required the filing of Form(s) 1099 to report payments she made during the tax year. In addition, Ms. Cohen drove a 2017 Lexus purchased on January 1, 2017 for all her business mileage. She drove the vehicle a total of 10,605 miles during the year for all purposes. Diana has written documentation to support the mileage amounts. She also has access to another vehicle for personal purposes.

The Cohens also received the following during the year:

Interest income from First Bank of New Jersey	$320
Interest income from Patterson, New Jersey School District	$200
Interest income from U.S. Treasury Bond	$350
Interest income from General Mills corporate bond	$400
Interest income from the State of Maines Tourism Support Private Activity Bond	$50,000
Qualified dividend income from Rio Tinto	$1,500
Qualified dividend income from Microsoft	$750
Qualified dividend income from Cooper Tire	$200
Qualified dividend income from Cardinal Health	$425
Qualified dividend income from Union Pacific	$140
Qualified dividend income from Procter & Gamble	$190
Qualified dividend income from PepsiCo	$225
Qualified dividend income from Kellogg	$200
Qualified dividend income from Abbott Labs	$275
Qualified dividend income from 3M	$350
Dividend income (not qualified) from China Fund	$2,000

The Cohens did not own, control or manage any foreign bank accounts, nor were they grantors or beneficiaries of a foreign trust during the tax year.

The Cohens had the following activity in their brokerage account during the year (all transactions were reported on a Form 1099-B and basis information for each stock sale was reported to the IRS):

Sold 2,000 shares of Microsoft	7/1/19	$22,500
Sold 75 shares of Apple, Inc.	4/15/19	$28,750
Sold 350 shares of Cooper Tire	10/14/19	$14,700
Sold 1,000 shares of Cardinal Health	9/3/19	$35,000
Sold 50 shares of Union Pacific	1/7/19	$2,750
Purchased 100 shares of Procter & Gamble	7/10/19	$7,700
Purchased 350 shares of Cooper Tire	11/1/19	$14,000
Purchased 350 shares of PepsiCo	5/14/19	$32,000
Purchased 300 shares of Kellogg	10/14/19	$21,000

Relevant tax basis/holding period information related to sales of securities in the current year:

Purchased 2,000 shares of Microsoft on 5/1/19 for $21,000

Purchased 200 shares of Apple, Inc. on 3/8/17 for $90,000

Purchased 300 shares of Cooper Tire on 1/12/16 for $9,000

Purchased 50 shares of Cooper Tire on 6/28/19 for $2,000

Received 1,000 shares of Cardinal Health from Dianas father as a gift on 10/10/03. Her fathers basis in the stock at the time of the gift was $7,000. Fair market value of the stock at the date of the gift was $41,000

Purchased 100 shares of Union Pacific on 9/5/18 for $6,000

The Cohens have a $43,000 long-term capital loss carryover from the prior tax year.

The Cohens received a New Jersey state income tax refund of $400 in May of 2019. The Cohens received the refund because they had overpaid their New Jersey state individual income tax in 2018. On their 2018 Federal income tax return, the Cohens itemized, and deducted and received a tax benefit for all state tax income taxes paid in 2018.

Diana is a 10% owner in an advertising agency named Bright Ideas (BI) (EIN 20-1234567). BI is a Subchapter S corporation located at 4700 MM Lane, West Rockport, ME 04865. The company reported ordinary business income for the year of $150,000. Diana received a K-1 from BI reporting her allocation of this business income. Diana acquired the stock several years ago. Her basis in the stock before considering her 2019 income allocation was $92,000. Diana is a passive owner with respect to this entity, and all her investment is at risk. Diana received no distribution from BI in 2019. BI is a specified service business for purposes of the Qualified Business Income Deduction, generating $150,000 of Qualified Business Income and paying $50,000 in W-2 wages to its non-shareholder employees.

Diana is also a 20% owner in Natural Sunshine, Inc. (NS) (EIN 24-9876543). NS is a Subchapter S corporation located at 6488 WYWH Dr, Islamorada, FL 33036. The company reported an ordinary business loss for the year of ($80,000). Diana received a K-1 from NS reporting her allocation of this business loss. Diana acquired the stock several years ago. Her basis in the stock before considering her 2019 loss allocation was $45,000. Diana is a passive owner with respect to this entity. NS is not a specified service business for purposes of the Qualified Business Income Deduction.

Joseph received 5,000 shares of restricted (common) stock from his employer on July 1, 2019. The terms of the restricted stock grant are such that if Joseph is still employed by Alternative Energy on July 1, 2022 the entire 5,000 shares will vest and become his property. Joseph, upon the advice of his tax advisor, prepared and filed an IRC Section 83(b) election on July 8, 2019. On July 1, 2019, the shares were valued at $5 per share. Joseph estimates the value of the shares in five years will be at least $150 per share. Joseph notified Alternative Energy about the IRC Section 83(b) election in a timely manner. None of the income tax consequences of this restricted stock grant was included in the $178,325 reported as part of Josephs gross wages (see above), so if Joseph has a 2019 tax consequence from the granting or 83(b) election, he will report it as other income.

The Cohens paid the following expenses during the year:

Dentist (unreimbursed by insurance)	$1,500
Doctors (unreimbursed by insurance)	$2,425
Prescriptions (unreimbursed by insurance)	$675
Real property taxes on residence	$7,525
Vehicle (not used for business) property tax based upon value	$2,250
Mortgage interest on principal residence mortgage of $600,000	$20,550
Home equity interest on $40,000 mortgage used to purchase new car	$3,600
Contribution to United Way	$5,000
Contribution to American Cancer Society	$7,000
Contribution to neighborhood drive to oppose development project	$500
Contribution to the Temple Mount Synagogue	$15,000

The Cohens also donated clothing, electronics, furniture and other household goods to the Salvation Army of Pleasantville, New Jersey on April 15, 2019. Estimated thrift value of the goods donated was $375.

Miscellaneous Information

On September 1, the Cohens paid $200 in foreign taxes attributable to the dividend received from the China Fund.

The Cohens would like to contribute to the Presidential Election Campaign Fund. The Cohens would also like to receive a refund (if any) of tax they may have overpaid for the year. Their preferred method of receiving the refund is by check.