Joseph Green, age 45, is single. He lives at 3519 Base Lane, Tuscon, AZ 85701. His Social Security number is 111-11-1112. Joseph wants $3 to go to the Presidential Election Campaign Fund.

Josephs wife, Becky, passed away in June 2016. Josephs son, Gilbert, who is age 16, resides with Joseph. Gilbert's Social Security number is 123-45-6788.

Joseph owns a sole proprietorship for which he uses the accrual method of accounting and maintains no inventory. His revenues and expenses for 2018 are as follows:

Sales revenue	$675,000
Cost of goods sold (based on purchases for the year)	355,000
Salary expense	80,000
Rent expense	25,000
Utilities	10,000
Telephone	5,500
Advertising	6,500
Bad debts	4,000
Depreciation *	15,000
Health insurance **	20,000
Accounting and legal fees	6,000
Supplies	1,000

* New office equipment ($15,000); Joseph chose to use the immediate expensing 179 election

** $15,000 for employees and $5,000 for Joseph

Other income received by Joseph includes the following:

Dividend income (qualified dividends):
Gator, Inc.	$8,000
Wrap, Inc.	2,000
Interest income:
Fifth First Bank	8,000
Third Bank	1,500
City of Tuscon, AZ bonds	12,000

During the year, Joseph and his sole proprietorship had the following property transactions:

1. Sold Biff, Inc. stock for $40,000 on March 12, 2018. He had purchased the stock on September 5, 2015, for $50,000.

2. Received an inheritance of $200,000 from his uncle, Jerry. Joseph used $125,000 to purchase Gabriel, Inc. stock on May 15, 2018, and invested $75,000 in Gold, Inc. stock on May 30, 2018.

3. Received Orange, Inc. stock worth $10,000 as a gift from his aunt, Jane, on June 17, 2018. Her adjusted basis for the stock was $6,000. No gift taxes were paid on the transfer. Jane had purchased the stock on April 1, 2012. Joseph sold the stock on July 1, 2018, for $25,000.

4. On July 15, 2018, Joseph sold one-half of the Gabriel, Inc. stock for $40,000.

5. Joseph was notified on August 1, 2018, that Yellow, Inc. stock he purchased from a colleague on September 1, 2017, for $42,500 had become worthless. While he perceived that the investment was risky, he did not anticipate that the corporation would declare bankruptcy.

6. On August 15, 2018, Joseph received a parcel of land in Phoenix worth $210,000 in exchange for a parcel of land he owned in Tucson. Because the Tucson parcel was worth $235,000, he also received $25,000 cash. Josephs adjusted basis for the Tucson parcel was $210,000. He originally purchased it on September 18, 2015.

7. On December 1, 2018, Joseph sold the condominium in which he had been living for the past 20 years (2859 Smallhouse Lane, Tuscon, AZ 85701) and moved into a rented townhouse. The sales price was $465,000, selling expenses were $28,500, and repair expenses related to the sale were $9,400. Joseph purchased the condominium for $200,000.

Josephs potential itemized deductions, exclusive of the aforementioned information, are as follows:

Medical expenses (before the 7.5% floor)	$ 9,000
Property taxes on residence	6,000
State income taxes	3,000
Charitable contributions	8,000
Mortgage interest on residence	12,000
Sales taxes paid	4,500

During the year, Joseph makes estimated Federal income tax payments of $32,000 (payments of $8,000 were made on April 15, 2018, June 15, 2018, September 15, 2018 and December 15, 2018).