JOSEPH AND DIANA COHEN

INDIVIDUAL FEDERAL INCOME TAX RETURN

Joseph (age 52) and Diana (age 54) Cohen are married and 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. 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. The Cohens pay for

Rebecca's tuition and room in board while she takes classes full time; she is not currently employed.

The Cohens provided the following information:

Joseph's social security number is 598-94-2583

Diana's social security number is 301-52-2942

Rebecca's social security number is 887-44-8710

Alan's social security number is 810-42-9092

David's social security number is 855-11-3021

The Cohen's mailing address is 85 North Maple Drive, Pleasantville, New Jersey 08232

Joseph Cohen reported the following 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

$35,230

$8,900

The above amounts do not reflect any income items described below. Joseph's 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 2020. The insurance, valued at $16,000, was provided by

Joseph's employer, Alternative Energy.

Diana Cohen received the following self-employment income 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

Jensen's Health Products

$8,500

Strategic Solutions

$3,750

In this self-employment endeavor, Diana is an active participant and the activities qualify as trade or

businesses for the Qualified Business Income Deduction. Unfortunately, Diana did not keep records of

any of her business expenses for the year.

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

3

Interest income from the State of Maine's

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

Life insurance payment - Mutual life (mother's passing)

$150,000

Cash gift from her father

$5,000

New Jersey state income tax refund*

$325

* Refund was from state tax they paid in 2019. They deducted all of their state taxes as itemized

deductions in 2019. Total itemized deductions were $32,000, $3,000 of which were state taxes.

Diana received the following payments as a result of a lawsuit she filed for damages sustained in a car

accident:

Medical Expenses for physical injuries

$16,500

Emotional Distress (from having been physically injured)

$7,300

Punitive Damages

$30,000

Total

$53,800

Eight years ago, Joseph purchased an annuity contract for $88,000. He received his first annuity

payment on January 1, 2020. The annuity will pay Joseph $15,000 per year for ten years (beginning with

this year). The $15,000 payment was reported to Joseph on Form 1099-R for the current year.

On January 3, 2020, the Cohens sold their prior principal residence. They purchased that residence in

2011 and had lived there full-time until they sold it this year. They originally purchased the home for

$310,000. The Cohen family has never claimed any tax depreciation (nor were they allowed to) on the

home. The sales price of the home was $825,000. The home is located at 45 East Entrada Trail,

Lexington New Jersey 40502.

The Cohens took two trips to Atlantic City. While on the first trip they lost $2800 gambling, but on the

second trip they won $2600.

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 made the following payments during 2020:

Dentist (unreimbursed by insurance)

$1,500

Doctors (unreimbursed by insurance)

$475

Prescriptions (unreimbursed by insurance)

$255

Real property taxes on residence

$4,200

4

Vehicle registration fee (based on age of the vehicle)

$175

Mortgage interest on principle residence

$7,845

Contribution to the American Lung Association

$2,300

Contribution to the Habitat for Humanity

$1,200

Contribution to Methodist Church of NJ

$3,000

Contribution to Senator Rick Hartley's Re-election Campaign

$2,500

During the year, Joseph paid $16,600 in alimony and child support payments to a former spouse, Natalie

(SSN #568-72-8787), whom he divorced in 2014. When his daughter Wendy (SSN #568-72-666), who

lives with her mother full-time, reaches the age of 18 the payments will drop to $5,600.

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

7/1/20

$22,500

Sold 75 shares of Apple, Inc.

4/15/20

$28,750

Sold 300 shares of Cooper Tire

10/14/20

$14,700

Purchased 100 shares of Procter & Gamble

7/10/20

$7,700

Purchased 350 shares of Cooper Tire

11/1/20

$14,000

Purchased 350 shares of PepsiCo

5/14/20

$32,000

Purchased 300 shares of Kellogg

10/14/20

$21,000

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

Purchased 2,000 shares of Microsoft on 5/1/20 for $21,000

Purchased 200 shares of Apple, Inc. on 3/8/18 for $90,000

Purchased 300 shares of Cooper Tire on 1/12/17 for $9,000

In order for Joseph and Diana to maintain their full-time jobs, they send David to a child care program

after school five days a week. During the year, they paid the day care operator $12,250 for David's care.

The Cohens' personal residence was burglarized on October 1. The Cohens had the following personal-

use property stolen:

Item

Purchase Date

Fair Value on

Date of Theft

Tax Basis of Item

Insurance

Reimbursement

Received

Laptop computer

09/01/2020

3,000

3,000

500

Rifle

03/01/2018

4,000

4,500

500

TV/Projector

03/01/2018

5,000

13,000

1,000

2007 Honda Pilot

07/01/2019

8,000

10,500

500

Total

14,000

25,000

2,500

4

Vehicle registration fee (based on age of the vehicle)

$175

Mortgage interest on principle residence

$7,845

Contribution to the American Lung Association

$2,300

Contribution to the Habitat for Humanity

$1,200

Contribution to Methodist Church of NJ

$3,000

Contribution to Senator Rick Hartley's Re-election Campaign

$2,500

During the year, Joseph paid $16,600 in alimony and child support payments to a former spouse, Natalie

(SSN #568-72-8787), whom he divorced in 2014. When his daughter Wendy (SSN #568-72-666), who

lives with her mother full-time, reaches the age of 18 the payments will drop to $5,600.

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

7/1/20

$22,500

Sold 75 shares of Apple, Inc.

4/15/20

$28,750

Sold 300 shares of Cooper Tire

10/14/20

$14,700

Purchased 100 shares of Procter & Gamble

7/10/20

$7,700

Purchased 350 shares of Cooper Tire

11/1/20

$14,000

Purchased 350 shares of PepsiCo

5/14/20

$32,000

Purchased 300 shares of Kellogg

10/14/20

$21,000

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

Purchased 2,000 shares of Microsoft on 5/1/20 for $21,000

Purchased 200 shares of Apple, Inc. on 3/8/18 for $90,000

Purchased 300 shares of Cooper Tire on 1/12/17 for $9,000

In order for Joseph and Diana to maintain their full-time jobs, they send David to a child care program

after school five days a week. During the year, they paid the day care operator $12,250 for David's care.

The Cohens' personal residence was burglarized on October 1. The Cohens had the following personal-

use property stolen:

Item

Purchase Date

Fair Value on

Date of Theft

Tax Basis of Item

Insurance

Reimbursement

Received

Laptop computer

09/01/2020

3,000

3,000

500

Rifle

03/01/2018

4,000

4,500

500

TV/Projector

03/01/2018

5,000

13,000

1,000

2007 Honda Pilot

07/01/2019

8,000

10,500

500

Total

14,000

25,000

2,500