Note: This problem is for the 2018 tax year. 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: Salary $ 80,000 Interest income- Money market account at Omni Bank Savings account at Boone State Bank City of Springfield general purpose bonds $300 1,100 3,000 4,400 Inheritance from Daniel 60,000 Life insurance proceeds Amount from sale of St. Louis lot 200,000 80,000 9,000 700 Proceeds from estate sale Federal income tax refund (for 2017 tax overpayment) 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 Daniel's 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. Logan's expenditures for 2018 include the following: $11,500 Medical expenses (including $10,500 for dental) Taxes, State of Missouri income tax (includes withholdings during 2018) $4,200 4,500 Property taxes on personal residence Interest on home mortgage (Boone State Bank) Contribution to church (paid pledges for 2018 and 2019) 8,700 5,600 4,800 Logan and his dependents are covered by his employer's 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 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, 2018, upon the advice of his pastor, he prepaid his pledge for 2019. Logan's household, all of whom he supports, includes the following: Social Security Number Logan Taylor (age 48) Helen Taylor (age 70) Asher Taylor (age 23) Mia Taylor (age 22) 123-45-6787 123-45-6780 123-45-6783 Birth Date 08/30/1970 01/13/1948 07/18/1995 02/16/1996 123-45-6784 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. 12 a Child tax credit/credit for other dependents 0 x b Add any amount from Schedule 3 and check here ........ y credit for other dependents C o x ox Note: This problem is for the 2018 tax year. 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: Salary $ 80,000 Interest income- Money market account at Omni Bank Savings account at Boone State Bank City of Springfield general purpose bonds $300 1,100 3,000 4,400 Inheritance from Daniel 60,000 Life insurance proceeds Amount from sale of St. Louis lot 200,000 80,000 9,000 700 Proceeds from estate sale Federal income tax refund (for 2017 tax overpayment) 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 Daniel's 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. Logan's expenditures for 2018 include the following: $11,500 Medical expenses (including $10,500 for dental) Taxes, State of Missouri income tax (includes withholdings during 2018) $4,200 4,500 Property taxes on personal residence Interest on home mortgage (Boone State Bank) Contribution to church (paid pledges for 2018 and 2019) 8,700 5,600 4,800 Logan and his dependents are covered by his employer's 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 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, 2018, upon the advice of his pastor, he prepaid his pledge for 2019. Logan's household, all of whom he supports, includes the following: Social Security Number Logan Taylor (age 48) Helen Taylor (age 70) Asher Taylor (age 23) Mia Taylor (age 22) 123-45-6787 123-45-6780 123-45-6783 Birth Date 08/30/1970 01/13/1948 07/18/1995 02/16/1996 123-45-6784 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. 12 a Child tax credit/credit for other dependents 0 x b Add any amount from Schedule 3 and check here ........ y credit for other dependents C o x ox