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 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 2018. 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: Airfare $2,900 Hotel $1,450 Meals $390 Parking $320 Diana drove 290 business miles for her consulting-related activities (she has documentation to verify)

Board of Director-related: Meals $124 Hotel $225 Diana drove 315 business miles for her board of director activities (she has documentation to verify)

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 2016 Lexus purchased on January 1, 2016 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 7/1/18 $22,500 Sold 75 shares of Apple, Inc. 4/15/18 $28,750 Sold 350 shares of Cooper Tire 10/14/18 $14,700 Sold 1,000 shares of Cardinal Health 9/3/18 $35,000 Sold 50 shares of Union Pacific 1/7/18 $2,750 Purchased 100 shares of Procter & Gamble 7/10/18 $7,700 Purchased 350 shares of Cooper Tire 11/1/18 $14,000 Purchased 350 shares of PepsiCo 5/14/18 $32,000 Purchased 300 shares of Kellogg 10/14/18 $21,000

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

Purchased 2,000 shares of Microsoft on 5/1/18 for $21,000 Purchased 200 shares of Apple, Inc. on 3/8/16 for $90,000 Purchased 300 shares of Cooper Tire on 1/12/15 for $9,000 Purchased 50 shares of Cooper Tire on 6/28/185 for $2,000 Received 1,000 shares of Cardinal Health from Dianas father as a gift on 10/10/02. 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 9/5/17 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 2018. The Cohens received the refund because they had overpaid their New Jersey state individual income tax in 2017. On their 2017 Federal income tax return, the Cohens itemized, and deducted and received a tax benefit for all state tax income taxes paid in 2017.

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 2017 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 2018. 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 2017 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, 2018. 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, 2018. On July 1, 2018, 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 2018 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 Second mortgage interest on principal residence mortgage of $40,000 $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, 2018. 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.

During the year, the Cohens paid a portion of Rebeccas tuition to attend The College of Liberal Arts of New Jersey (CLA). They also purchased Rebeccas school books. Rebecca attended the spring/summer and the fall semesters as a full-time student. In total, the Cohens paid $9,000 for tuition and $2,000 for books. Rebecca used $6,000 from a scholarship she received from CLA to pay the remaining $6,000 of tuition for the year. Rebecca was not required to perform any services as a condition of accepting the scholarship. Rebecca was not employed during the year. CLAs address and employer identification number (EIN) is as follows:

The College of Liberal Arts of New Jersey 65 Ivory Tower Penns Grove, NJ 08069 EIN- 22-5698324

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.