Alton Newman, age 67, is married and files a joint return with his wife, Clair, age 65. Alton and Clair are both retired, and during 2021, they received Social Security benefits of $10,000 (the taxable amount is $5,829). Both Alton and Clair are covered by Medicare. Altons Social Security number is 111-11-1119, and Clairs is 123-45-6786. They reside at 210 College Drive, Columbia, SC 29201.

Alton, who retired on January 1, 2021, receives benefits from a qualified pension plan of $2,750 a month for life. His total contributions to the plan (none of which were deductible) were $168,250. In January 2021, he receives a bonus of $2,000 from his former employer for service performed in 2020. No income taxes were withheld on this bonus by his former employer (Amalgamated Industries, Inc., EIN 12-3456789, 114 Main Street, Columbia, SC 29201). Although Amalgamated Industries, Inc. accrued the bonus in 2020, it was not paid until 2021.

Clair, who retired on December 31, 2020, started receiving benefits of $1,400 a month on January 1, 2021. Her contributions to the qualified pension plan (no of which were deductible) were $74,100.

On September 27, 2021, Alton and Clair received a pro rata 10% stock dividend on 600 shares of stock they owned. They had bought the stock on March 5, 2014, for $20 a share. On December 16, 2021, they sold the 60 shares for $55 a share.

On October 10, 2021, Clair sold the car she had used in commuting to and from work for $17,000. She had paid $31,000 for the car in 2015.

On July 14, 2013, Alton and Clair received a gift of 1,000 shares of stock from their son, Thomas. Thomass basis in the stock was $35 a share (fair market value at the date of the gift was $25). No gift tax was paid on the transfer. Alton and Clair sold the stock on October 8, 2021, for $24 a share.

On May 1, 2021, Clairs mother died, and Clair inherited her personal residence. In February 2021, her mother had paid the property taxes for 2021 of $2,100. The residence had a fair market value of $235,000 and an adjusted basis to her mother of $160,000 on the date of her death. Clair listed the house with a real estate agent, who estimated it was worth $240,000 as of December 31, 2021.

Clair and Alton paid estimated Federal income tax of $2,000 and had itemized deductions of $6,800 (excluding any itemized deductions associated with the beach house). They did not engage in any virtual currency transactions during the year. If they have overpaid their Federal income tax, they want the amount refunded. Both Clair and Alton want $3 to go to the Presidential Election Campaign Fund.

Compute their net tax payable or refund due for 2021. If you use tax forms for your computations you will need a minimum of Form 1040-SR, Schedule D, and Form 8949.