John Benson, age 40, is single. His Social Security number is 111-11-1111, and he resides at 150 Highway 51, Tangipahoa, LA 70465. John has a 5-year-old child, Kendra, who lives with her mother, Katy. John pays alimony of $6,000 per year to Katy and child support of $12,000. The $12,000 of child support covers 65% of Katys costs of rearing Kendra. Kendras Social Security number is 123-45-6789, and Katys is 123-45-6788. Johns mother, Sally, lived with him until her death in early September 2015. He incurred and paid medical expenses for her of $12,900 and other support payments of $11,000. Sallys only sources of income were $5,500 of interest income on certifi- cates of deposit and $5,600 of Social Security benefits, which she spent on her medi- cal expenses and on maintenance of Johns household. Sallys Social Security number was 123-45-6787.

John is employed by the Highway Department of the State of Louisiana in an executive position. His salary is $95,000. The appropriate amounts of Social Security tax and Medicare tax were withheld. In addition, $9,500 was withheld for Federal income taxes, and $4,000 was withheld for state income taxes.

In addition to his salary, Johns employer provides him with the following fringe benefits: Group term life insurance with a maturity value of $95,000. The cost of the pre- miums for the employer was $295. Group health insurance plan. Johns employer paid premiums of $5,800 for his coverage. The plan paid $2,600 for Johns medical expenses during the year. Upon the death of his aunt Josie in December 2014, John, her only recognized heir, inherited the following assets:

Asset Car Land300 acres IBM stock Cash 90,000 15,000 10,000 Josies Adjusted Basis $35,000 FMV at Date of Death $ 19,000 175,000 40,000 10,000 Three months prior to her death, Josie gave John a mountain cabin. Her adjusted basis for the mountain cabin was $120,000, and the fair market value was $195,000. No gift taxes were paid. During the year, John had the following transactions: On February 1, 2015, he sold for $45,000 Microsoft stock that he inherited from his father four years ago. His fathers adjusted basis was $49,000, and the fair market value at the date of the fathers death was $41,000. The car John inherited from Josie was destroyed in a wreck on October 1, 2015. He had loaned the car to Katy to use for a two-week period while the engine in her car was being replaced. Fortunately, neither Katy nor Kendra was injured. John received insurance proceeds of $16,000, the fair market value of the car on October 1, 2015. On December 28, 2015, John sold the 300 acres of land to his brother, James, for its fair market value of $160,000. James planned on using the land for his dairy farm. Other sources of income for John were as follows: Dividend income (qualified dividends) Interest income: Guaranty Bank City of Kentwood water bonds Award from state of Louisiana for outstanding suggestion for highway beautification $ 3,500 1,000 2,000 10,000

Potential itemized deductions for John, in addition to items already mentioned, were as follows: Property taxes paid on his residence and cabin Property taxes paid on personalty Estimated Federal income taxes paid Charitable contributions Mortgage interest on his residence Orthodontic expenses for Kendra $7,000 3,500 3,000 4,500 7,200 4,000

Part 1Tax Computation Compute Johns net tax payable or refund due for 2015.