John Smith (Social Security number 112-11-2111) is 55 years old and is married to Jane Smith (Social Security number 124-54-6789). She is also 55 years old. The Smiths live at 521 Pacific Coast Highway Laguna Beach, CA 92651. They file a joint return and have two dependent children, Ryan, age 14, and Nicole, age 15. Ryan's Social Security number is 123-45-6888, and Nicole's Social Security number is 123-46-6787. In 2019, John and Jane had the following transactions: 1. John received $275,000 included in his W-2 Box 1 from New Wave Corporation, where he is an engineer. Withholding for Federal income tax was$40,850. Assume the proper amount of Social Security and Medicare tax has been withheld including the .9% ACA Medicare tax (if any). 2. John's mother passed away and he received a parcel of Land worth $ 500,000 and Life Insurance Proceeds of $1,000,000. 3. John and Jane received $15,200 interest on Tustin school district bonds. 4. John received $25,000 of interest on Treasury bills. 5. John received $7,500 interest from a CD at Bank of America. 6. John received $10,000 of a dividend on Ford Motor Company stock that he has owned for 30 days. 7. John received 150 shares of Apple Corporation common stock as a stock dividend. The shares had a fair market value of $10,500 at the time he received them, and she did not have the option of receiving cash. 8. John and Jane received a $3,500 refund on their 2018 California income taxes in 2019. They itemized deductions in 2018 and claimed the maximum $10,000 state tax deduction of which $5,000 was property tax. Their California tax liability in 2018 was $25,000 of which $5,000 was deducted in 2018. 9. John paid $13,800 alimony to his former wife, Blanche Smith (Social Security number 124-48- 8786). The divorce was finalized in2002. 10. John and Jane kept the receipts for their 2019 sales taxes paid of $2,100. 11. John and Jane's itemized deductions for 2019 were as follows: State income tax paid and withheld totaled$ 7,100. Real estate taxes on their principal residence were$5,500. Mortgage interest on their principal residence was$20,500. Cash contributions to the church totaled $5,800. Medical Expenses related to Doctors, etc. of $15,000 (Note the maximum amount was paid out of their Health Savings Account seebelow). Job related unreimbursed expenses of $5,500 related to travel. Tax Preparation Fees of $3,000. Contributions to the Mayor of Laguna Beach's campaign of$1,800. 12. John and Jane set up a new Health Savings Account for the maximum amount allowed in 2019 Note John is 55 years old). They have a high deductible medical plan at New Wave Corporation.