David r. and ella m. cole (ages 39 and 38, respectively) are husband and wife who live at 1820 elk avenue, denver, co 80202. david is a self-employed consultant specializing in retail management, and ella is a dental hygienist for a chain of dental clinics.

david earned consulting fees of $145,000 in 2018. he maintains his own office and pays for all business expenses. the coles are adequately covered by the medical plan provided by ella’s employer, but have chosen not to participate in its § 401(k) retirement plan.

david's employment-related expenses for 2018 are summarized below.

airfare $8,800
lodging 5,000
meals (during travel status) 4,800
entertainment 3,600
ground transportation (e. g., limos, rental cars, and taxis) 800
business gifts 900
office supplies (includes postage, overnight delivery, and copying) 1,500
the entertainment involved taking clients to sporting and musical events and providing food before, during, or after those events. the business gifts consisted of $50 gift certificates to a national restaurant. these were sent by david during the christmas holidays to 18 of his major clients.