Question
Logan B. Taylor is a widower whose wife, Sara, died on June 6, 2017. He lives at 4680 Dogwood Lane, Springfield, MO 65801. He is
Logan B. Taylor is a widower whose wife, Sara, died on June 6, 2017. He lives at 4680 Dogwood Lane, Springfield, MO 65801. He is employed as a paralegal by a local law firm. During 2019, he had the following receipts:
Salary | $ 80,000 | |||
Interest income | ||||
Money market account at Omni Bank | $300 | |||
Savings account at Boone State Bank | 1,100 | |||
City of Springfield general purpose bonds | 3,000 | 4,400 | ||
Inheritance from Daniel | 60,000 | |||
Life insurance proceeds | 200,000 | |||
Amount from sale of St. Louis lot | 80,000 | |||
Proceeds from estate sale | 9,000 | |||
Federal income tax refund (for 2018 tax overpayment) | 700 |
Logan inherited securities worth $60,000 from his uncle, Daniel, who died in 2019. Logan also was the designated beneficiary of an insurance policy on Daniel's life with a maturity value of $200,000. The lot in St. Louis was purchased on May 2, 2014, for $85,000 and held as an investment. Because the neighborhood has deteriorated, Logan decided to cut his losses and sold the lot on January 5, 2019, for $80,000. The estate sale consisted largely of items belonging to Sara and Daniel (e.g., camper, boat, furniture, and fishing and hunting equipment). Logan estimates that the property sold originally cost at least twice the $9,000 he received and has declined or stayed the same in value since Sara and Daniel died.
Logan's expenditures for 2019 include the following:
Medical expenses (including $10,500 for dental) | $11,500 | |||
Taxes | ||||
State of Missouri income tax (includes withholdings during 2019) | $4,200 | |||
Property taxes on personal residence | 4,500 | 8,700 | ||
Interest on home mortgage (Boone State Bank) | 5,600 | |||
Contribution to church (paid pledges for 2019 and 2020) | 4,800 |
While Logan and his dependents are covered by his employer's health insurance policy, he is subject to a deductible, and dental care is not included. The $10,500 dental charge was for Helen's implants. Helen is Logan's widowed mother, who lives with him (see below). Logan normally pledges $2,400 ($200 per month) each year to his church. On December 5, 2019, upon the advice of his pastor, he prepaid his pledge for 2020.
Logan's household, all of whom he supports, includes the following:
Social Security Number | Birth Date | |
Logan Taylor (age 48) | 123-45-6787 | 08/30/1971 |
Helen Taylor (age 70) | 123-45-6780 | 01/13/1949 |
Asher Taylor (age 23) | 123-45-6783 | 07/18/1996 |
Mia Taylor (age 22) | 123-45-6784 | 02/16/1997 |
Helen receives a modest Social Security benefit. Asher, a son, is a full-time student in dental school and earns $4,500 as a part-time dental assistant. Mia, a daughter, does not work and is engaged to be married.
Federal income tax of $4,500 was withheld from his wages.
Required:
Compute Logan's income tax for 2019. If Logan has any overpayment on his income tax, he wants the refund sent to him. Assume that the proper amounts of Social Security and Medicare taxes were withheld. Logan does not own and did not use any virtual currency during the year, and he does not want to contribute to the Presidential Election Campaign Fund.
Please complete a schedule A with answers on the actual form please.
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