Comprehensive Problem 8-2

Tsate Kongai (birthdate 02/14/1955) is an unmarried high school principal. Tsate received the following tax documents (which are located on separate tabs in the problem):

W-2 Form:

1 Wages, tips, other compensation 57,100.00	2 Federal income tax withheld 6,150.00
3 Social security wages 60,100.00	4 Social security tax withheld 3,726.20
5 Medicare wages and tips 60,100.00	6 Medicare tax withheld 871.45
12a Code D 3,000.00	13 Retirement Plan x
16 State wages, tips, etc. 57,100.00	17 State income tax 1,200.00

Form 1099-INT:

1 Interest Income $201.33

Form 1099-DIV:

1a Total ordinary dividends $4,120.00	1b Qualified dividends $4,120.00
4 Federal income tax withheld $0.00

Form 1099-B:

1a Description of property (Example 100 sh. XYZ Co.) 100 shs. Johnson Corp
1b Date acquired 12/13/2020	1c Date sold or disposed 11/05/2021
1d Proceeds $ 14,500.00	1e Cost or other basis $ 35,550.00

During the year, Tsate paid the following amounts (all of which can be substantiated):

Home mortgage interest reported on Form 1098 (not shown)	$9,600
KS state income tax payment for 2020	$500
MasterCard interest	560
Life insurance (whole life policy)	750
Property taxes on personal residence	1,500
Blue Cross medical insurance premiums	300
Other medical expenses	800
Income tax preparation fee	300
Charitable contributions (in cash)	750

On January 28, 2021, Tsate sold land for $180,000 (basis to Tsate of $130,000). The land was purchased 6 years ago as an investment. Tsate received $50,000 as a down payment and the buyer's 10-year note for $130,000. The note is payable at the rate of $13,000 per year plus 2.5 percent interest. On December 31, 2021, Tsate received a payment of $16,250 that included $3,250 of interest.

Tsate also helps support his father, Jay Hawke, who lives in a nearby senior facility. Jay's Social Security number is 433-33-2121. Tsate provides over one-half of Jay's support but Jay also has a pension that paid him income of $14,000 in 2021. Jay's Social Security benefits were $3,200 in 2021. Tsate received a $1,400 EIP in 2021.

Required: Complete Tsate's Form 1040-SR, Schedules A, B, and Qualified Dividends and Capital Gain Tax Worksheet.

This is part of Schedule A. (Taxes you paid) I don't know what 5a is other than it has general sales taxes. I am stuck here.

Taxes You Paid

5

State and local taxes.

a

State and local income taxes or general sales taxes. You may include either income taxes or general sales taxes on line 5a, but not both. If you elect to include general sales taxes instead of income taxes, check this box . . . . . . . . . . . .

5a

fill in the blank

b

State and local real estate taxes (see instructions) . . . . . . . . .

5b

1,500

c

State and local personal property taxes . . . . . . . . . . . . . . . . .

5c

d

Add lines 5a through 5c . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5d

e

Enter the smaller of line 5d or $10,000 ($5,000 if married filing separately) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5e

6

Other taxes. List type and amount _ _ _ _ _ _ _ _ _ _ _ _ _

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

6

7

Add lines 5e and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7