Logan B. Taylor is a widower whose wife, Sara, died on June 6, 2016. He lives at 4680 Dogwood Lane, Springfield, MO 65801. He is employed as a paralegal by a local law firm. During 2018, he had the following receipts:

Logan inherited securities worth $60,000 from his uncle, Daniel, who died in 2018. Logan also was the designated beneficiary of an insurance policy on Daniels life with a maturity value of $200,000. The lot in St. Louis was purchased on May 2, 2013, 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, 2018, 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.

Logans expenditures for 2018 include the following:

Logan and his dependents are covered by his employers health insurance policy for all of 2018. However, he is subject to a deductible, and dental care is not included. The $10,500 dental charge was for Helens implants. Helen is Logans widowed mother, who lives with him (see below). Logan normally pledges $2,400 ($200 per month) each year to his church. On December 5, 2018, upon the advice of his pastor, he prepaid his pledge for 2019.

Logans household, all of whom he supports, includes the following:

	Social Security Number	Birth Date
Logan Taylor (age 48)	123-45-6787	08/30/1970
Helen Taylor (age 70)	123-45-6780	01/13/1948
Asher Taylor (age 23)	123-45-6783	07/18/1995
Mia Taylor (age 22)	123-45-6784	02/16/1996

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.

2. Of Logans $60,000 inheritance from Daniel, which of the following amounts is included in gross income? a. $0 b. $15,000 c. $45,000 d. $60,000

$ 80,000 $ 300 1,100 3,000 Salary Interest income- Money market account at Omni Bank Savings account at Boone State Bank City of Springfield general purpose bonds Inheritance from Daniel Life insurance proceeds Amount from sale of St. Louis lot Proceeds from estate sale Federal income tax refund (for 2017 tax overpayment) 4,400 60,000 200,000 80,000 9,000 700 $11,500 Medical expenses (including $10,500 for dental) Taxes- State of Missouri income tax (includes withholdings during 2018) Property taxes on personal residence Interest on home mortgage (Boone State Bank) Contribution to church (paid pledges for 2018 and 2019) $4,200 4,500 8,700 5,600 4,800 $ 80,000 $ 300 1,100 3,000 Salary Interest income- Money market account at Omni Bank Savings account at Boone State Bank City of Springfield general purpose bonds Inheritance from Daniel Life insurance proceeds Amount from sale of St. Louis lot Proceeds from estate sale Federal income tax refund (for 2017 tax overpayment) 4,400 60,000 200,000 80,000 9,000 700 $11,500 Medical expenses (including $10,500 for dental) Taxes- State of Missouri income tax (includes withholdings during 2018) Property taxes on personal residence Interest on home mortgage (Boone State Bank) Contribution to church (paid pledges for 2018 and 2019) $4,200 4,500 8,700 5,600 4,800