---- Name - Neil B.

Need help with the 2016 joint income tax return (with appropriate schedules) for Neil and Mae King using the following information:

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Name - Neil B. King

Home Address - 7605 Walnut Street, Kansas City, MO 64114.

Age - 42

Job - Chemist at Sargent Pharmaceuticals

Salary - 90,000

Social Security # - 123-45-6785

Job Promotion 2017 - Promoted to Regional Manager, $110,000

Pension - No contribution during 2016

Job Health Insurance 2016 - Contributed $4,000 pretax (covers Neil, Mae and their children)

Job Life Insurance - Group term life insurance $200,000

New Job Search Expenses 2016 - $3,200 (employment agency fee), $1,800 (resume consultation), $4,100 (job interview expenses)

Job Expenses (Non reimbursable) 2016 - Midwestern Chemists Association [MCA] monthly (11 months total) dinner meeting $825 , Professional organization dues $240, Professional journal prescriptions $180, Management Institute of America [MIA] correspondence study course $230

Mother's(Lucy) medical expenses 2016 - Hospital $9,800 ($4,900 of the expenses incurred in 2015), funeral expenses $16,000

W-2 Form info - Income tax withholding of $6,500 (Federal) and $4,000 (state), Additional Income for taxable value of life insurance - $180

Gun collection sell 2016 - $32,000

Monthly House Rental Income - $2,500, totaled in 2016 for $25,500.

Initial (one time) Tenant Rental deposit - $3,000.

Initial (one time)Tenant last month's rent payable in advance - $2,500

Rental Property taxes - $4,800

Rental House Insurance - $3,900

Rental House Repairs - $2,100

Real estate renter's location service - $400

Jury duty 2016 - Paid $700 (remitted to his job) and incurred unreimbursed parking expenses of $60

Life insurance proceeds(from Lucy's death) - $50,000

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Name - Mae R. King

Home Address - 7605 Walnut Street, Kansas City, MO 64114.

Age - 48

Job - Board Certified Anesthesiologist (self-employed), works part-time in a number of hospitals

Social Security # - 123-45-6786

Business Address - Home Address (7605 Walnut Street, Kansas City, MO 64114)

Business Practice Receipts - 2016: $245,000 of which $16,000 is for services performed in 2015. 2017: $17,500 for services rendered in December 2016

Business Expenses 2016 - Medical clothing (e.g., lab coats, surgical scrubs) $2,200, Medical malpractice insurance $9,500, State medical license fee $450, Professional organization dues $350, Professional journal subscriptions $340

Accident settlement 2016 - $90,000

Car work mileage - 2,900 miles, totaling 9,000 miles for the year.

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Joint (Neil and Mae):

Long term capital loss carryover - $1,500 from 2015

Dependents: Two children: Ethan M. King (age 15), SS# 123-45-6788 and Bella A. King (age 14) 123-45-6789, both full time high school students. Neil's (deceased in 2016) mother, Lucy E. King, SS# 123-45-6787.

Quarterly income tax payments - $20,000 (Federal) and $9,000 (state), totaling payments of $80,000 (Federal) and $36,000 (state).

Federal income tax refund - $3,000 in 2015 which was applied toward their 2016 income tax.

Medical expenses (not covered by insurance) - Dentist bills $3,100

Ad valorem property taxes on personal residence - $4,100

Interest on home mortgage - $2,600

Contributions to Goodwill (a qualified charity) - $3,600

Missouri state income tax refund 2015 - $450

Proceeds from garage sale - $2,600

Interest income on Kansas City general purpose bonds - $480

CitiBank certificate of deposit - $600 initial deposit, $1,080 current amount

Audit money paid in 2016 - $2,250 additional income tax for 2014 (no interest or penalties were included)

Stocks - 3,000 shares of Dove Pharmaceuticals bought in 2015 for $25,000, sold in 2016 for $2,000

Investment property 2016 - 2 owned unimproved vacant lots (located at 3400 and 3402 Sycamore Lane) were condemned by the city and exchanged for a $20,000 unimproved lot at 440 Genoa Street

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Supplemental Information

Mae's Business: Mae keeps her business records and conducts business (e.g., conducts pre-surgery appointments, renders professional advice, bills patients) at her home. Mae doesn't maintain a specific area for exclusive business use so she doesn't claim an office in the home for tax purposes. Mae's professional activity code is 621111.

Mae's Work Car: Mae drives the family Suburban (purchased on March 2015) for work. She uses the standard mileage method for computing deductible vehicle costs.

Inheritance: Neil's widowed mother, Lucy, died on February 2016 leaving Neil as the life insurance beneficiary. As Lucy's sole heir, Neil also inherited her home (located at 1420 Chickadee Lane, Topeka, KS 66546) and its furnishings. The cost and values are as follows:

Cost Basis    FMV on 2/3/16

Lot    $10,000    $30,000

House $110,000     $250,000

Furnishings $55,000     $25,000

Rental Property Lease: Executed on April 2016. For MACRS depreciation purposes, Neil plans to use the straight-line method with the mid-month convention to compute the deduction for the realty and the 200% declining-balance method with a half-year convention for the personalty.

Mae's Accident: Mae was struck by an impaired delivery van and hospitalized for a week. The owner of the delivery service paid for Mae's medical expenses accompanied with a letter that stated "This $90,000 is a settlement for physical injuries sustained by Mae King." Mae was represented in the negotiations by her brother, a practicing attorney who didn't charge for his services.

Gun Collect Gift: Neil's father gave him the gun collection on December 2011 when it was worth $22,000. His father originally bought the collection in 1997 for $14,000. Neil's sale of the collection was documented by a bill of sale, signed by both Neil and the buyer.

Stock: The Kings' broker provided them with a Form 1099-B for their stock investment, which reported the gross proceeds from the sale and their basis in the stock.

Garage Sale: The Kings sold personal items (e.g., camper, furniture, hunting and fishing equipment) belonging to Neil's parents. The estimated original cost of the items is $7,100 and the garage sale proceeds were donated to the Alzheimer's Association (a qualified charity) in memory of Neil's father.

Additional Car Mileage: As part of a program sponsored by their church (a qualified charity), the Kings used the family Suburban to transport senior citizens to religious services, for a total of 900 miles. The Suburban also was used for numerous visits to an orthodontist for both of the Kings' children, for a total of 480 miles.

Additional Tax Information: Neil and Mae are married, calendar year, cash basis taxpayers.The Kings don't contribute to the Presidential Election Campaign Fund and don't own any foreign bank accounts or foreign investments. The Kings want to apply any Federal tax refund to their 2017 tax liability and are are preparing their own return (i.e., no preparer is involved). For the past several years, the Kings have itemized their deductions from AGI instead of using the standard deduction. In addition, the Kings have deducted state income taxes (not sales taxes) for the past several years.