John and Ellen Brite (SSN 000-00-1111 and 000-00-2222, respectively) are married and file a joint return. They have no dependents. John owns an unincorporated specialty electrical lighting retail store, Brite-On. Brite-On had the following assets on January 1, 2015:
        Assets                                                                                                                 Cost
Old store building purchased April 1, 2000....................................................$100,000
Equipment (7-year recovery) purchased January 10, 2010...............................30,000
Inventory valued using FIFO method: 4,000 light bulbs..................................$5/bulb

Brite-On purchased a competitor’s store on March 1, 2015, for $107,000. The purchase price included the following:
New store building.................................................$60,000 (FMV)
Land...........................................................................18,000 (FMV)
Equipment (5-year recovery)..................................11,000 (FMV)
Inventory: 3,000 light bulbs..................................$ 6/bulb (cost)

On June 30, 2015, Brite-On sold the 7-year recovery period equipment for $12,000. Brite-On leased a $30,500 car for $500/month beginning on January 1, 2015. The car is used 100% for business and was driven 14,000 miles during the year. 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 2015 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..................................................$64,000
Interest expense on business loans......................4,000
Auto expenses (gas, oil, etc.)...................................3,800
Taxes and licenses....................................................3,300
Utilities.......................................................................2,800
Salaries....................................................................24,000
John and Ellen also had some personal expenses:
Medical bills.............................................................$4,500
Real property taxes..................................................3,800
State income taxes...................................................4,000
Home mortgage interest.........................................5,000
Charitable contributions (cash)..................................600

The Brites received interest income on a bank savings account of $275. John and Ellen made four $5,000 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 2010: The Brites elected out of bonus depreciation and did not elect Sec. 179.

• Equipment acquired in 2015: The Brites elected Sec. 179 to expense the cost of the 5-year equipment but elected out of bonus depreciation.
• Assume that the lease inclusion rules require that Brite-On reduce its deductible lease expense by $8.
Compute the Brite’s taxable income and balance due or refund for 2015.