The Deans forgot to tell you that on March 29, 2018, they sold their previous house and moved to the home they currently live in on Yucca Drive. The address of their old house was 40 Chestnut Drive, Santa Fe, NM 87501. They purchased the old house together on October 17, 2006 for a price of $235,000. Both Lance and Wanda have lived in the house since they bought it in 2006. Because the house has always been used for personal reasons (i.e., the house was not used for investment or business purposes), its sale did not qualify as a like-kind exchange. Neither Lance nor Wanda have excluded a gain from a sale of a home within the last two years. The Deans received their full asking price for the house of $775,000 at the closing. They had to pay the broker a commission of 4% of that amount, or $31,000.

2018 A Department of the Treasury - Internal Revenue Service (99) on Form 1040 U.S. Individual Income Tax Return ZUIO OMB No. 1545-0074 IRS Use Only - Do not write or staple in this space Filing status: Single (X Married filing jointly Married filling separately Head of household Qualifying widower) Your first name and initial Last rame Your social security number Lance Dean 123-45-6786 Your standard deduction: Someone can claim you as a dependent You were born before January 2, 1954 You are blind 11 joint return, spouse's first name and initial Last name Spouse's social security number Wanda Dean 123-45-6787 X Spouse standard deduction: Full-year health care coverage Someone can claim your spouse as a dependent Spouse was born before January 2, 1954 or exemp! (see inst.) Spouse is blind D Spouse itemizes on a separate return or you were dual status alien Home address (number and street). If you have a P.O. box, sbe instructions. Apt. no. Presidential Election Campaign (800 inst.) 431 Yucca Drive You Spouse Chy, town or post office, state, and ZP code. If you have a foreign address, attach Schedule 6. If inore than four dependents Santa Fe, NM 87501 see Inst, and here - Dependents (see instructions): (2) Social security (9) Relationship to you (4) il qualities for (see inst.): (1) First name Last name number Child tax credit Credit for other dependents Penny Allen 123-45-6788 Daughter Kyle Allen 123-45-6780 Son X1 Sign Under penalties of perjury, I declare that I have axaminad this return and accompanying schedules and statements, and to the best of my knowledge and beliet, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge Here Your signature Date Your occupation If the IRS sent you an identity Protection Joint return? PIN enter it Bureau employee See instructions. here (see inst.) Keep a copy Spouse's signature. If a joint return, both must sign. Spouse's occupation the RS sert you on Identity Protection PIN, enter if for your records. Paralegal here (ses inst.) Preparer's name Preparer's signature PTIN Firm's EIN Check it Paid Sample Sample X 3rd Party Designes Preparer Firm's name CPA Firm Phone no. 7185551234 Self-employed Use Only Firm's address 123 Main Street Anytown, NY 11439 BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions FDIAO112L 01/08/19 Form 1040 (2018) Page 2 Attach Form(s) 1 Wages, salaries, tips, etc. Attach Form(s) W-2....... 101,000. W-2. Also attach Form(s) W-2G 2a Tax-exempt interest ............ 2a 1.000. b Taxable interest..... 2b 1,600. and 1099-R if tax was withheld. 3a Qualified dividends............. b Ordinary dividends.. 3b 4a IRAs, pensions, and annuities b Taxable amount.. 5a Social security benefits....... 5a b Taxable amount... 5b 6 Total income. Add lines 1 through. Add any amount fram Schedule 1, line 22 600. 103, 200. 7 Adjusted gross income. If you have no adjustments to income, enter the amount from Standard line 6; otherwise, subtract Schedule 1, line 36, from line 6... 98,200. Deduction for 8 Standard deduction or itemized deductions (from Schedule A).................. 24,000. Single or married filing | 9 Qualified business income deduction (see instructions) separately, $12,000 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-O-.. 74,200. Married filing 11 a Tax (see inst.) 8,526. (check if any from: 1 Form(s) 8814 jointly or 2 Form 4972 3 Qualifying b Add any amount from Schedule 2 and check here..... widow(er), ............. U 11 8,526. $24,000 12 a Child tax credit/credit for other dependents 2,500. Head of b Add any amount from Schedule 3 and check here....... U12 2,500. household, 13 $18,000 13 Subtract line 12 from line 11. If zero or less, enter -O-... 6,026. If you 14 Other taxes. Attach Schedule 4.... 15 checked any Total tax. Add lines 13 and 14............. 156 ,026. box under 16 Federal income tax withheld from Forms W-2 and 1099..... 166 ,300. Standard 17 Refundable credits: a EIC (see inst.) deduction, see b Sch. 8812 c Form 8863 instructions. Add any amount from Schedule 5 18 Add lines 16 and 17. These are your total payments. 6,300. Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid....... 274. 20 a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here. 20a 274. Direct deposit? b Routing number .........XXXXXXXXXX c Type: Checking Savings See instructions. d Account number......... XXXXXXXXXXXXXXXXXXXXXXXX 21 Amount of line 19 you want applied to your 2019 estimated tax........ 21 Amount You Owe 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions...... 23 Estimated tax penalty (see instructions).................. 23 Go to www.irs.gov/Form 1040 for instructions and the latest information. Form 1040 (2018) 14 . .... 22 2018 A Department of the Treasury - Internal Revenue Service (99) on Form 1040 U.S. Individual Income Tax Return ZUIO OMB No. 1545-0074 IRS Use Only - Do not write or staple in this space Filing status: Single (X Married filing jointly Married filling separately Head of household Qualifying widower) Your first name and initial Last rame Your social security number Lance Dean 123-45-6786 Your standard deduction: Someone can claim you as a dependent You were born before January 2, 1954 You are blind 11 joint return, spouse's first name and initial Last name Spouse's social security number Wanda Dean 123-45-6787 X Spouse standard deduction: Full-year health care coverage Someone can claim your spouse as a dependent Spouse was born before January 2, 1954 or exemp! (see inst.) Spouse is blind D Spouse itemizes on a separate return or you were dual status alien Home address (number and street). If you have a P.O. box, sbe instructions. Apt. no. Presidential Election Campaign (800 inst.) 431 Yucca Drive You Spouse Chy, town or post office, state, and ZP code. If you have a foreign address, attach Schedule 6. If inore than four dependents Santa Fe, NM 87501 see Inst, and here - Dependents (see instructions): (2) Social security (9) Relationship to you (4) il qualities for (see inst.): (1) First name Last name number Child tax credit Credit for other dependents Penny Allen 123-45-6788 Daughter Kyle Allen 123-45-6780 Son X1 Sign Under penalties of perjury, I declare that I have axaminad this return and accompanying schedules and statements, and to the best of my knowledge and beliet, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge Here Your signature Date Your occupation If the IRS sent you an identity Protection Joint return? PIN enter it Bureau employee See instructions. here (see inst.) Keep a copy Spouse's signature. If a joint return, both must sign. Spouse's occupation the RS sert you on Identity Protection PIN, enter if for your records. Paralegal here (ses inst.) Preparer's name Preparer's signature PTIN Firm's EIN Check it Paid Sample Sample X 3rd Party Designes Preparer Firm's name CPA Firm Phone no. 7185551234 Self-employed Use Only Firm's address 123 Main Street Anytown, NY 11439 BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions FDIAO112L 01/08/19 Form 1040 (2018) Page 2 Attach Form(s) 1 Wages, salaries, tips, etc. Attach Form(s) W-2....... 101,000. W-2. Also attach Form(s) W-2G 2a Tax-exempt interest ............ 2a 1.000. b Taxable interest..... 2b 1,600. and 1099-R if tax was withheld. 3a Qualified dividends............. b Ordinary dividends.. 3b 4a IRAs, pensions, and annuities b Taxable amount.. 5a Social security benefits....... 5a b Taxable amount... 5b 6 Total income. Add lines 1 through. Add any amount fram Schedule 1, line 22 600. 103, 200. 7 Adjusted gross income. If you have no adjustments to income, enter the amount from Standard line 6; otherwise, subtract Schedule 1, line 36, from line 6... 98,200. Deduction for 8 Standard deduction or itemized deductions (from Schedule A).................. 24,000. Single or married filing | 9 Qualified business income deduction (see instructions) separately, $12,000 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-O-.. 74,200. Married filing 11 a Tax (see inst.) 8,526. (check if any from: 1 Form(s) 8814 jointly or 2 Form 4972 3 Qualifying b Add any amount from Schedule 2 and check here..... widow(er), ............. U 11 8,526. $24,000 12 a Child tax credit/credit for other dependents 2,500. Head of b Add any amount from Schedule 3 and check here....... U12 2,500. household, 13 $18,000 13 Subtract line 12 from line 11. If zero or less, enter -O-... 6,026. If you 14 Other taxes. Attach Schedule 4.... 15 checked any Total tax. Add lines 13 and 14............. 156 ,026. box under 16 Federal income tax withheld from Forms W-2 and 1099..... 166 ,300. Standard 17 Refundable credits: a EIC (see inst.) deduction, see b Sch. 8812 c Form 8863 instructions. Add any amount from Schedule 5 18 Add lines 16 and 17. These are your total payments. 6,300. Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid....... 274. 20 a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here. 20a 274. Direct deposit? b Routing number .........XXXXXXXXXX c Type: Checking Savings See instructions. d Account number......... XXXXXXXXXXXXXXXXXXXXXXXX 21 Amount of line 19 you want applied to your 2019 estimated tax........ 21 Amount You Owe 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions...... 23 Estimated tax penalty (see instructions).................. 23 Go to www.irs.gov/Form 1040 for instructions and the latest information. Form 1040 (2018) 14 . .... 22