PROBLEM 2 Neil B. (age 42) and Mae R. (age 48) King are married and live at 7605 Walnut Street, Kansas City, MO 64114. Neil is a chemist employed by Sargent Pharmaceuticals, Inc., and Mae is a self-employed doctor of anesthesiology. They are calendar year, cash basis taxpayers 1. Sargent Pharmaceuticals develops and produces injectable medicines used in chemotherapy treatments for cancer patients. Neil manages the Kansas City facility for an annual salary of $90,000. Sargent makes contributions to a qualified defined contribution pension plan for all of its full-time employees. Although Neil also has the opportunity to make contributions to the plan, he chose not to do so in 2016. Neil participates in his employer's group health insurance plan, to which he contrib- uted $4,000 in 2016 for medical coverage. These contributions are made with pre tax dollars. The health plan covers Neil, Mae, and their two dependent children. Because of the risk associated with Neil's work (i.e., processing chemotherapy drugs), Sargent provides all of its employees with $200,000 of group term life insur- ance. An additional $180 of income is included in Neil's Form W-2 to report the tax able value of this insurance 2. In late 2015, three employees at Sargent's Chicago facility were seriously injured while processing a customer order. While the injuries occurred in what the com pany called a "freak accident" Neil began to look for a safer job in the chemical industry. He incurred the following expenses during 2016 Employment agency fee Rsum consultation, preparation, and distribution Expenses in connection with job interviews $3,200 1,800 4,100 Neil received several attractive offers but ultimately decided against changing jobs. Influential in his choice was a promotion to regional manager and a $20,000 pay raise starting in 2017. 3. Sargent generally reimburses Neil for expenses related to his work for the company. However, as a matter of policy, Sargent does not reimburse for the following Monthly dinner meetings of the Midwestern Chemists Association [MCA] Dues to professional organizations Subscriptions to professional journals MIA correspondence study course $825 240 180 230