Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2014. Alfred and Beulah will file a joint return for 2016. Alfred's Social Security number is 111-11-1112. Beulah's Social Security number is 123-45-6789, and she adopted "Old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304.

Alfred was divorced from Sarah Old in March 2014. Under the divorce agreement, Alfred is to pay Sarah $1,250 per month for the next 10 years or until Sarah's death, whichever occurs first. Alfred pays Sarah $15,000 in 2016. In addition, in January 2016, Alfred pays Sarah $50,000, which is designated as being for her share of the marital property. Also, Alfred is responsible for all prior years' income taxes. Sarah's Social Security number is 123-45-6788.

Alfred's salary for 2016 is $150,000, and his employer, Cherry, Inc. (Federal I.D. No. 98-7654321), provides him with group term life insurance equal to twice his annual salary. His employer withheld $24,900 for Federal income taxes and $8,000 for state income taxes. The proper amounts were withheld for FICA taxes.

Beulah recently graduated from law school and is employed by Legal Aid Society, Inc. (Federal I.D. No. 11-1111111), as a public defender. She receives a salary of $40,000 in 2016. Her employer withheld $7,500 for Federal income taxes and $2,400 for state income taxes. The proper amounts were withheld for FICA taxes.

Beulah has $2,500 in qualified dividends on Yellow Corporation stock she inherited. Alfred and Beulah receive a $1,900 refund on their 2015 state income taxes. They itemized deductions on their 2015 Federal income tax return (total of $15,000). Alfred and Beulah pay $4,500 interest and $1,450 property taxes on their personal residence in 2016. Their charitable contributions total $2,400 (all to their church). They paid sales taxes of $1,400, for which they maintain the receipts. Both spouses had health insurance for all months of 2016 and do not want to contribute to the Presidential Election Campaign.

Required:

Compute the Olds' net tax payable (or refund due) for 2016. Use Form 1040 and Schedule A, Schedule B and the Qualified Dividends and Capital Gain Tax Worksheet to complete this tax return.

It may be necessary to complete the tax schedules before completing Form 1040.

Enter all amounts as positive numbers.

If an amount box does not require an entry or the answer is zero, enter "0".

Make realistic assumptions about any missing data.

When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.

Use the 2016 Tax Rate Schedule provided. Do not use the Tax Tables.

Complete Olds' Schedule A for 2016.

SCHEDULE A (Form 1040) Department of the Treasury Internal Revenue Service (99)	Itemized Deductions Information about Schedule A and its separate instructions is at www.irs.gov/schedulea. Attach to Form 1040.	OMB No. 1545-0074
		2016 Attachment Sequence No. 07

Name(s) shown on Form 1040 ALFRED E OLD										Your social security number 111-11-1112
Medical and Dental Expenses		Caution. Do not include expenses reimbursed or paid by others.
	1	Medical and dental expenses (see instructions) . . . . . . . . . . .						1
	2	Enter amount from Form 1040, line 38 . . . . . . . . . . . .			2
	3	Multiply line 2 by 10% (.10). But if either you or your spouse was born before January 2, 1951, multiply line 2 by 7.5% (.075) instead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
								3
	4	Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- . . . . . . . . . . . . . . . . . . .									4
Taxes You Paid	5	State and local
		a Income taxes	}	. . . . . . . . . . . . . . . . . . . . . .				5
		b General sales taxes
	6	Real estate taxes (see instructions) . . . . . . . . . . . . . . . . . . .						6
	7	Personal property taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .						7
	8	Other taxes. List type and amount _ _ _ _ _ _ _ _ _ _ _ _
		_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _						8
	9	Add lines 5 through 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .									9
Interest You Paid Note. Your mortgage interest deduction may be limited (see instructions).	10	Home mortgage interest and points reported to you on Form 1098 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .						10
	11	Home mortgage interest not reported to you on Form 1098. If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
		_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _						11
	12	Points not reported to you on Form 1098. See instructions for special rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .						12
	13	Mortgage insurance premiums (see instructions) . . . . . . . . .						13
	14	Investment interest. Attach Form 4952 if required. (See instructions.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .						14
	15	Add lines 10 through 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .									15
Gifts to Charity If you made a gift and got a benefit for it, see instructions.	16	Gifts by cash or check. If you made any gift of $250 or more,
		see instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .						16
	17	Other than by cash or check. If any gift of $250 or more, see instructions. You must attach Form 8283 if over $500						17
	18	Carryover from prior year . . . . . . . . . . . . . . . . . . . . . . . . . .						18
	19	Add lines 16 through 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .									19
Casualty and Theft Losses	20	Casualty or theft loss(es). Attach Form 4684. (See instructions.) . . . . . . . . . . . . . . . . . . . .									20
Job Expenses and Certain Miscellaneous Deductions	21	Unreimbursed employee expensesjob travel, union dues, job education, etc. Attach Form 2106 or 2106-EZ if required.
		(See instructions.) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _						21
	22	Tax preparation fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .						22
	23	Other expensesinvestment, safe deposit box, etc. List type and amount _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
		_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _						23
	24	Add lines 21 through 23 . . . . . . . . . . . . . . . . . . . . . . . . . . .						24
	25	Enter amount from Form 1040, line 38 . . . . . . . . . . . .			25
	26	Multiply line 25 by 2% (.02) . . . . . . . . . . . . . . . . . . . . . . . .						26
	27	Subtract line 26 from line 24. If line 26 is more than line 24, enter -0- . . . . . . . . . . . . . .									27
Other Miscellaneous Deductions	28	Otherfrom list in instructions. List type and amount _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
											28

Total Itemized Deductions	29	Is Form 1040, line 38, over $154,950?
			No. Your deduction is not limited. Add the amounts in the far right column for lines 4 through 28. Also, enter this amount on Form 1040, line 40.	}	. . . . . . .	29
			Yes. Your deduction may be limited. See the Itemized Deductions Worksheet in the instructions to figure the amount to enter.
	30	If you elect to itemize deductions even though they are less than your standard deduction, check here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

KIA

For Paperwork Reduction Act Notice, see Form 1040 instructions.

Schedule A (Form 1040) 2016

EXHIBIT 43 Uniform Premiums for $1,000 of Group Term Life Insurance Protection Attained Age on Last Day of Employee's Tax Year Under 25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70 and above Cost per $1,000 of Protection for One-Month Period .05 .06 .08 .09 10 15 .23 .43 .66 1.27 2.06 Reg. $ 1.79-3, effective for coverage after June 30, 1999