This problem is for the $2021$ tax year.

Alton Newman, age $67,$ is married and files a joint return with his wife, Clair, age $65.$ Alton and Clair are both retired, and during $2021,$ they received Social Security benefits of $$10,000.$ Both Alton and Clair are covered by Medicare. Alton's Social Security number is $111-11-1119,$ and Clair's is $123-45-6786.$ They reside at $210$ College Drive, Columbia, SC $29201.$ The Newmans received the appropriate coronavirus recovery rebates $($economic impact payments$)$; related questions in ProConnect Tax should be ignored.

Alton, who retired on January $1,2021,$ receives benefits from a qualified pension plan of $$2,750$ a month for life. His total contributions to the plan $($none of which were deductible$)$ were $$168,250.$ In January $2021,$ he received a bonus of $$2,000$ from his former employer for service performed in $2020.$ No Federal or state income taxes were withheld on this bonus by his former employer $($Amalgamated Industries, Inc.; EIN $12-3456789$; $114$ Main Street, Columbia, SC $29201).$ Although Amalgamated Industries, Inc., accrued the bonus in $2020,$ it was not paid until $2021.$

Clair, who retired on December $31,2020,$ started receiving benefits of $$1,400$ a month on January $1,2021.$ Her contributions to the qualified pension plan $($none of which were deductible when made$)$ were $$74,100.$

On September $27,2021,$ Alton and Clair received a pro rata $10\%$ stock dividend on $600$ shares of stock they owned. They had bought the stock on March $5,2014,$ for $$20$ a share. On December $16,2021,$ they sold the $60$ dividend shares for $$55$ a share.

On October $10,2021,$ Clair sold the car she had used in commuting to and from work for $$17,000.$ She had paid $$31,000$ for the car in $2015.$

On July $14,2013,$ Alton and Clair received a gift of $1,000$ shares of stock from their son, Thomas. Thomas's basis in the stock was $$35$ a share $($fair market value at the date of gift was $$25).$ No gift tax was paid on the transfer. Alton and Clair sold the stock on October $8,2021,$ for $$24$ a share.

On May $1,2021,$ Clair's mother died, and Clair inherited her personal residence. In February $2021,$ her mother had paid the property taxes for $2021$ of $$2,100.$ The residence had a fair market value of $$235,000$ and an adjusted basis to the mother of $$160,000$ on the date of her death. Clair listed the house with a real estate agent, who estimated it was worth $$240,000$ as of December $31,2021.$

Clair received rent income of $$6,000$ on a beach house she inherited three years ago from her uncle Charles. She had rented the property for one week during the July $4$ holiday and one week during the Thanksgiving holiday. Charles's adjusted basis in the beach house was $$150,000,$ and its fair market value on the date of his death was $$240,000.$ Clair and Alton used the beach house for personal purposes for $56$ days during the year. Expenses associated with the house were $$3,700$ for utilities, maintenance, and repairs; $$2,200$ for property taxes; and $$800$ for insurance. There are no mortgages on the property.

Clair and Alton paid estimated Federal income tax of $$2,000$ and had itemized deductions of $$6,800($excluding any itemized deductions associated with the beach house$).$ They did not engage in any virtual currency transactions during the year.

If they have overpaid their Federal income tax, they want the amount refunded. Both Clair and Alton want $$3$ to go to the Presidential Election Campaign Fund.

Compute their $2021$ Federal income tax payable or refund due and complete their $2021$ tax return using appropriate forms and schedules.

You are required to complete the Qualified Dividends and Capital Gain Tax Worksheet. The form is provided to assist you in computing the tax.

Make realistic assumptions about any missing data.

If an amount box does not require an entry or the answer is zero, enter $"0".$

Enter all amounts as positive numbers, unless otherwise instructed.

It may be necessary to complete the tax schedules before completing Form $1040-$SR$.$

When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.

Use the $2021$ Tax Rate Schedule provided. Do not use the Tax Tables.