Practice Set Assignments- Comprehensive Tax Return Problems PROBLEM 1-INDIVIDUALS (FORM 1040) David R. and Sheri N. Johnson (ages 45 and 46) are married and live at 641 Cody Way Casper, WY 82609. David is a consulting engineer, while Sheri is a paralegal. They file a joint return and use the cash basis for tax purposes. 1. Trained as a mining engineer, David has developed considerable expertise in the BLOCK TAX SOFTWARE treatment and disposition of waste material. He is also well-versed in the Federal and state requirements for land reclamation projects. David maintains a consulting practice through which he advises clients on these matters. David's business activity code is 541990. Most of his clients are small and medium-size mine owner/ operators located in Wyoming and contiguous states (eg, Montana, Idaho, Utah). Usually, David is retained by a client on a contract fee basis and is reimbursed for all out-of-pocket expenses. In performing his services, David usually visits the job site and later submits his recommendations in a written report along with a state- ment for his services and expenses. David received the following amounts from his consulting business in 2015 Fees for services rendered Expense reimbursements: 92,800 $8,200 Airfare Meals Lodging Transportation (taxis, airport limos, car rentals) Subtotal for expense reimbursement 6,100 20,420 113,220 Total received 2The following fees for rendered services are not included in the receipts listed in item 1 above Echo Mining: Payment received January 2016; work done December 2015 Sesa Mining: Payment received January 2015; work done December 2014 Cormorant Mining: No payment received; work done March 2015 $5,100 4,400 3,700 E-1