John and Ellen Brite are married, file a joint return, and are less than 65 years old. They have no dependents and claim the standard deduction. John owns an unincorporated specialty electrical lighting retail store, Brite-On. Brite-On had the following assets on January 1, 2021:

Assets .............................................................................................................................................Cost
Old store building purchased April 1, 2006.......................................................................$100,000
Equipment (7-year recovery) purchased January 10, 2016..................................................30,000
Inventory valued using FIFO method: 4,000 light bulbs.....................................................$5/bulb

Brite-On purchased a competitor’s store on March 1, 2021, for $206,000. The purchase price included the following:

New store building...........................................................$115,000 (FMV)
Land........................................................................................28,000 (FMV)
Equipment (5-year recovery)..............................................45,000 (FMV)
Inventory: 3,000 light bulbs..............................................$ 6/bulb (cost)

On June 30, 2021, Brite-On sold the 7-year recovery period equipment for $12,000. Brite-On leased a car for $860/month beginning on June 1, 2021. The car is used 100% for business.
Brite-On sold 8,000 light bulbs at a price of $15/bulb during the year. Also, Brite-On made additional purchases of 4,000 light bulbs in August 2021 at a cost of $7/bulb.
Brite-On had the following revenues (in addition to the sales of light bulbs) and additional expenses:
Service revenues.........................................................................................$94,000
Interest expense on business loans.............................................................6,000
Auto expenses (gas, oil, etc.).........................................................................4,800
Taxes and licenses..........................................................................................3,300
Utilities.............................................................................................................2,800
Salaries...........................................................................................................36,000
Ellen receives $42,000 of wages from employment elsewhere, from which $4,000 of federal income taxes were withheld. John and Ellen made four $3,100 quarterly estimated
tax payments. For self-employment tax purposes, assume John spent 100% of his time at the store while Ellen spends no time at the store.

Additional Facts:
• Equipment acquired in 2016: The Brites elected out of bonus depreciation and did not elect Sec. 179.
• Equipment acquired in 2021: The Brites elected Sec. 179 to expense the cost of the 5-year equipment.
• Assume that the lease inclusion rules require that Brite-On reduce its annual deductible lease expense by $41.
Compute the Brite’s taxable income and balance due or refund for 2021.