Logan B. Taylor is a widower whose wife, Sara, died on June 7, 2020. He lives at 4680 Dogwood Lane, Springfield, Missouri 65801. He is employed as a paralegal by a local law firm. During 2021 he had the following receipts: $82,000 350 2,100 3,050 Salary (reported on his W-2) Interest Money market account at Omni Bank Savings accounts at Boone State Bank City of Springfield general purpose bonds Poetry prize Lottery winnings Payments received from Annuities-R-Us Sale of St. Louis parcel of land, net of sales commission Sale of Vives stock 5,500 1,000 500 1,200 80,000 9,000 Logan entered and won $1,000 a poetry contest sponsored by a local bookstore. He accepted the check and then donated it to his favorite charity. In 2021, Logan purchased a lottery ticket and won $500. In 2012, Logan invested $8,000 in an annuity with Annuities-R-Us. The annuity pays $1,200 per year for 20 years. Logan purchased a parcel of land in St. Louis on May 2, 2010, for $95,000 and held as an investment. As the neighborhood has deteriorated, Logan decided to cut his losses and sold the lot on January 5, 2021, for $82,500. He paid real estate commissions on the sale of $2,500. Logan invested $5,000 in an internet startup company, Vives, on March 1, 2021. The stock quickly climbed and Logan sold it on April 1, 2021 for $9,000. Logan builds furniture in his free time. During 2021, he bartered furniture he built with one of his friends for $1,800 of car repairs. Logan owed the bank $700 for an old boat loan. The bank cancelled the debt during 2021. Logan's household, all of whom he supports, includes the following: Social Security Number Birthdate Logan Taylor (age 50) 123-45-6787 08/30/1971 Helen Taylor (age 72) 123-45-6780 01/31/1949 Asher Taylor (age 23) 123-45-6783 07/18/1998 Mia Taylor (age 16) 123-45-6784 02/16/2005 Helen, Logan's mother, receives a modest Social Security benefit (assume not taxable). Asher, a son, is a full-time student in dental school and earns $4,500 as a part-time dental assistant. Mia, a daughter, is in high school. She does not work. Logan's itemized deductions for 2021 total $15,000. Assume Logan does not qualify for any tax credits. Logan had $7,500 of federal income tax withheld from his wages (reported on his W-2). If Logan has any overpayment on his income tax, he wants the refund sent to him. 1. What is Logan's filing status? 2. List Logan's gross receipts (both taxable and nontaxable income). Do not list gross receipts from property transactions (i.e., stock sale or sale of St. Louis lot) in this step; we'll handle those transactions in Steps 4-5. 3. From these gross receipts, identify the items to include in his taxable income. Sum these to arrive at gross income. 4. Calculate the capital gain or loss on the Vives stock. Is it short-term or long-term? 5. Calculate the capital gain or loss from the sale of the St. Louis lot. Is it short-term or long-term? 6. From the receipts in Step 3, add or subtract the net gains and losses from Steps 4 and 5. 7. From gross income, subtract "for AGI deductions (zero we'll cover in Chapter 6) to arrive at adjusted gross income (AGI). Check figure: $86,250 8. Calculate Logans from AGI deductions. Decide if Logan will itemize deductions or claim the standard deduction. 9. Subtract the itemized or standard deduction from the AGI in Step 7 to arrive at taxable income. Check figure: $61,150 10. Use the 2021 tax table to determine Logan's tax. 11. Subtract the federal income tax withheld from Logan's wages on his W-2 to arrive at his tax due or refund Logan B. Taylor is a widower whose wife, Sara, died on June 7, 2020. He lives at 4680 Dogwood Lane, Springfield, Missouri 65801. He is employed as a paralegal by a local law firm. During 2021 he had the following receipts: $82,000 350 2,100 3,050 Salary (reported on his W-2) Interest Money market account at Omni Bank Savings accounts at Boone State Bank City of Springfield general purpose bonds Poetry prize Lottery winnings Payments received from Annuities-R-Us Sale of St. Louis parcel of land, net of sales commission Sale of Vives stock 5,500 1,000 500 1,200 80,000 9,000 Logan entered and won $1,000 a poetry contest sponsored by a local bookstore. He accepted the check and then donated it to his favorite charity. In 2021, Logan purchased a lottery ticket and won $500. In 2012, Logan invested $8,000 in an annuity with Annuities-R-Us. The annuity pays $1,200 per year for 20 years. Logan purchased a parcel of land in St. Louis on May 2, 2010, for $95,000 and held as an investment. As the neighborhood has deteriorated, Logan decided to cut his losses and sold the lot on January 5, 2021, for $82,500. He paid real estate commissions on the sale of $2,500. Logan invested $5,000 in an internet startup company, Vives, on March 1, 2021. The stock quickly climbed and Logan sold it on April 1, 2021 for $9,000. Logan builds furniture in his free time. During 2021, he bartered furniture he built with one of his friends for $1,800 of car repairs. Logan owed the bank $700 for an old boat loan. The bank cancelled the debt during 2021. Logan's household, all of whom he supports, includes the following: Social Security Number Birthdate Logan Taylor (age 50) 123-45-6787 08/30/1971 Helen Taylor (age 72) 123-45-6780 01/31/1949 Asher Taylor (age 23) 123-45-6783 07/18/1998 Mia Taylor (age 16) 123-45-6784 02/16/2005 Helen, Logan's mother, receives a modest Social Security benefit (assume not taxable). Asher, a son, is a full-time student in dental school and earns $4,500 as a part-time dental assistant. Mia, a daughter, is in high school. She does not work. Logan's itemized deductions for 2021 total $15,000. Assume Logan does not qualify for any tax credits. Logan had $7,500 of federal income tax withheld from his wages (reported on his W-2). If Logan has any overpayment on his income tax, he wants the refund sent to him. 1. What is Logan's filing status? 2. List Logan's gross receipts (both taxable and nontaxable income). Do not list gross receipts from property transactions (i.e., stock sale or sale of St. Louis lot) in this step; we'll handle those transactions in Steps 4-5. 3. From these gross receipts, identify the items to include in his taxable income. Sum these to arrive at gross income. 4. Calculate the capital gain or loss on the Vives stock. Is it short-term or long-term? 5. Calculate the capital gain or loss from the sale of the St. Louis lot. Is it short-term or long-term? 6. From the receipts in Step 3, add or subtract the net gains and losses from Steps 4 and 5. 7. From gross income, subtract "for AGI deductions (zero we'll cover in Chapter 6) to arrive at adjusted gross income (AGI). Check figure: $86,250 8. Calculate Logans from AGI deductions. Decide if Logan will itemize deductions or claim the standard deduction. 9. Subtract the itemized or standard deduction from the AGI in Step 7 to arrive at taxable income. Check figure: $61,150 10. Use the 2021 tax table to determine Logan's tax. 11. Subtract the federal income tax withheld from Logan's wages on his W-2 to arrive at his tax due or refund