Pam and Brian Carlson are married, are both age 50, and have two single dependent children, Brent aged 16, and Donald , aged 21, and live in Pittsburgh, California.

Brian has a rental house and Pam is an employee for two other companies.

During 2022, Brent had $ 4,200 of oil royalty income and Donald had $ 19,000 of wages income. Brent is in high school, and Donald is a full time student at SF State (his tuition is covered by a scholarship). Donald lives with Pam and Brian when not in school. Brent receives most of his support from Pam.

Brians rental house overlooks the beach in Bolinas, the house was bought for $ 825,000, and first rented out in 2008. In 2022 Brian had rental income (cash receipts) of $290,000, along with rental house expenses of: repairs $ 8,540, supplies $ 5,590, insurance $ 2,920, property taxes of $33,800 and licenses of $3,870, interest on a mortgage loan of $53,400, the total annual 2022 personal property depreciation for the rental house furnishings is $ 28,840, and utilities of $ 58,800. All of these expenses were paid by Brian during the year excepting the depreciation/noncash items, and all the expenses related to months of this year, 2022, except for the supplies which were used up early in 2023. For the rental house the tenants usually rent it for the month and use it as a personal residence, with Brian not generally responsible for daily services.

In 2021, Brian allowed a tenant to stay in the rental for a month, Azalea Enterprises, and pay later in the year, owing the amount of $ 18,000. Azalea agreed to pay this amount back with $ 1,800 interest during 2022. Azalea has filed for bankruptcy in 2022, and it is clear that this entire amount will not be received by Brian.

Pams wages for 2022 from job 1 were $ 120,000 with federal income tax withholding of $ 11,000, Social Security withholding of $7,440 and Medicare withholding of $1,740, state income tax withholding of $4,500, and, from job 2, wages of $ 30,000, with Federal income tax withholding of $ 5,000, Social Security withholding of $ 1,860 and Medicare withholding of $ 435. Pams jobs are in retail, books and stationery.

Brian had medical bills paid during the year 2022 as follows: doctor bills and hospital costs totaling $6,860, prescription drugs of $8,740, along with specially made eyeglasses costing $9,820. Pam drove Brian 680 miles to Los Angeles and back in January 2022 to see a specialist (following Doctors orders including that Brian not drive, and that Pam accompany him) and stayed overnight at a motel at a cost of $ 390.

Pam and Brian jointly own their home and paid mortgage interest of $ 16,300 and mortgage principal of $ 4,100 during 2022, for the months of 2022 to the bank on a loan (average principal balance $330,000) incurred to buy the home, which is secured by the home (bought in 2008). The homes property tax was paid on December 10th 2022 for $6,110.

Brian owns a cabin near Mount Tamulpius in Marin County. Brian paid $9,040 in mortgage interest during 2022, for the months of 2022 on a loan (average principal balance $180,000) incurred to buy the cabin, secured by the cabin, and Brian paid property taxes on the cabin of $ 5,420 on 12-10-2022. Pam and Brian used the cabin for two months during 2022, and rented it out for four months (monthly clients like the other rental) during 2022 (this is a normal years usage pattern), and received rent of $49,160 during 2022. The cabins utilities cost is $ 4,460, annually and the annual repair cost (both paid for in 2022) was $4,520. The cabin was first rented in 2012, when the cabin was worth $ 270,000 (the purchase price was $275,000).

Brians main rental house (in Bolinas) was broken into in December of 2021, and some items were stolen. Brian became aware of the break in in 2022, and estimates the value of the items lost are a television worth $2,190 which originally cost $ 4,100 (depreciation of $ 3,200 taken so far), a computer worth $1,200 which originally cost $3,870 (with $ 1,800 depreciation taken so far), some rare recordings worth $5,250 (which originally cost $ 5,000 to buy years ago which Brian kept in the hope of future sale) and repair costs to the rental building of $ 8,620. The building insurance policy has a high deductible, and thus only $9,310 of insurance proceeds were received in 2022 for the loss.

Brian, in order to successfully avoid any underpayment penalties, paid estimated 2022 federal income taxes of $ 5,500 each quarter, and paid them when due. Brian paid $1,600 for 2021 state income tax on April 15, 2022, along with four 2022 year estimates for state income taxes of $ 300 each paid during 2022 (the last mailed on December 30th).

Pam bought a boat last year, which is moored in Tiburon, and paid $ 4,200 in sales taxes on the purchase on 8-19-2022. The registration for the boat, and for Pams car, both paid in September of 2022, was $ 2,890 ($ 2,030 based on value) boat, and $ 890 ($ 230 based on value) car. On February 2, 2022, Pam made a contribution to the ASPCA of $ 820. Pam also drove 120 miles to aid the charity in its work and provided services worth $1,500 to the charity as well. All documentation and substantiation requirements were met.

Brian had taken trips to Las Vegas in May and July of 2022, to play Keno. In May he won $ 6,000, in July he lost $5,000.

Pam paid student loan interest (on a qualified loan debt) of $ 5,410 during 2022. Pam also paid $2,490 interest for her car loan to buy her car, to commute to work in, and paid $3,210 credit card interest during 2022.

What is Pam (and Brians) and Brents, and Donalds 2022 federal tax refund or amount due? (assume that Brent paid estimates for federal income taxes of $800, Donald had federal income tax withholding of $ 750, Social Security withholding of $ 1,178 and Medicare withholding of $276, state income tax withholding of $300, if you only do quiz 5, you may assume that Pam and Brians itemized deductions are $ 40,000.)