Note: This problem is for the 2019 tax year.

Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2017. Alfred and Beulah will file a joint return for 2019. Alfred's Social Security number is 111-11-1109. Beulah's Social Security number is 123-45-6780, and she adopted "Old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304.

Alfred was divorced from Sarah Old in March 2016. Under the divorce agreement, Alfred is to pay Sarah $1,250 per month for the next 10 years or until Sarah's death, whichever occurs first. Alfred pays Sarah $15,000 in 2019. In addition, in January 2019, Alfred pays Sarah $50,000, which is designated as being for her share of the marital property. Also, Alfred is responsible for all prior years' income taxes. Sarah's Social Security number is 123-45-6788.

Alfred's salary for 2019 is $150,000. He is an executive working for Cherry, Inc. (Federal I.D. No. 98-7654321). As part of his compensation package, Cherry provides him with group term life insurance equal to twice his annual salary. His employer withheld $24,900 for Federal income taxes and $8,000 for state income taxes. The proper amounts were withheld for FICA taxes.

Beulah recently graduated from law school and is employed by Legal Aid Society, Inc. (Federal I.D. No. 11-1111111), as a public defender. She receives a salary of $42,000 in 2019. Her employer withheld $7,500 for Federal income taxes and $2,400 for state income taxes. The proper amounts were withheld for FICA taxes.

Alfred and Beulah had interest income of $500. Alfred and Beulah receive a $1,900 refund on their 2018 state income taxes. They claimed the standard deduction on their 2018 Federal income tax return. Alfred and Beulah pay $4,500 interest and $1,450 property taxes on their personal residence in 2019. Their charitable contributions total $2,400 (all to their church). They paid sales taxes of $1,400, for which they maintain the receipts. Both spouses had health insurance for all of 2019 and they do not want to contribute to the Presidential Election Campaign.

Required:

Compute the Olds' net tax payable (or refund due) for 2019. Use Form 1040 and Schedule 1 to complete the tax return.

• It may be necessary to complete the tax schedule and worksheet before completing Form 1040.
• Enter all amounts as positive numbers.
• If an amount box does not require an entry or the answer is zero, enter "0".
• Make realistic assumptions about any missing data.
• When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.
• Use the2019 Tax Rate Scheduleprovided. Do not use the Tax Tables.

\fSCHEDULE 1 Additional Income and Adjustments to Income OMB No. 1545-00 (Form 1040 or 1040-SR) Department of the Treasury Attach to Form 1040 or 1040-SR. 2019 nternal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Attachment Sequence No. 01 Name(s) shown on Form 1040 or 1040-SR Your social security number At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Yes No Part I Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes 2a Alimony received 2a b Date of original divorce or separation agreement (see instructions) 3 Business income or (loss). Attach Schedule C . 3 Other gains or (losses). Attach Form 4797 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E. 5 Farm income or (loss). Attach Schedule F 7 Unemployment compensation. 8 Other income. List type and amount e 6 7 8 9 Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a 9 Part II Adjustments to Income 10 Educator expenses . . . 10 11 Form 2106 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach 11 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 14 15 Self-employed SEP, SIMPLE, and qualified plans . 15 16 Self-employed health insurance deduction 16 17 Penalty on early withdrawal of savings 17 18a Alimony paid . 18a Recipient's SSN c Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 Student loan interest deduction 20 21 Reserved for future use . 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 8a 22 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040 or 1040-SR) 20192019 Tax Rate Schedules SingleSendai X If taxable income is: But not Over over S 5 9.700 9,700 39,475 5 970.00 + 12% 9.700 39,475 84,200 4,543.00 + 22% 39,475 84.200 160,725 14,382.50 + 24% 84,200 160,725 204,100 32,740.50 + 32% 160,725 204,100 510,300 46,623.50 + 35% 204,100 510,300 153,798.50 + 37% 510.300 Married liking jointly or Qualifying widowlerl Sdndulo YI If taxable Income is: But not over 5 19,400 78,950 $ 1,940.00 + 12% 168,400 9,086.00 + 22% 70,950 321,450 28,765.00 + 24% 168,400 408,2\") 65,497.00 + 32% 321,450 612,350 93,257.00 + 35% 408,200 164,709.50 + 37% 612,350 Head of householdScintiulo Z If taxable Income is: But not Over over 5 0 13,850 5 1.305.00+12% 52,350 6,065.00 + 22% 84.200 12,962.00 + 24% 150,700 31,322.00 + 32% 204,100 45,210.00 + 35% 510,300 152,300.00 + 37% Manhd tiling separatelySchedule Y-2 If taxable income is: But not Over over 5 0 5 9,71 9,700 39,475 5 970.00 + 12% 39,475 84,2111 4,543.00 + 22% 84,200 160,725 14,382.50 + 24% 160,725 204,111} 32,748.50 + 32% 204.1(1) 46,628.50 4- 35% 306,175 82,354.75 + 37% EXHIBIT 12-10 Uniform Premiums for $1,000 of Group-Term Life Insurance Protection Cost per $1,000 of Protection 5-year Age Bracket for One Month Under 25 $0.05 25 to 29 06 30 to 34 08 35 to 39 .09 40 to 44 . 10 45 to 49 . 15 50 to 54 .23 55 to 59 43 60 to 64 66 65 to 69 1.27 70 and above 2.06