Cecil C. Seymour is a 64-year-old widower. He had income for 2017 as follows: Pension from former

Question:

Cecil C. Seymour is a 64-year-old widower. He had income for 2017 as follows:
Pension from former employer ........................................................................ $39,850
Interest income from Alto National Bank ........................................................ 5,500
Interest income on City of Alto bonds .............................................................. 4,500
Dividends received from IBM stock held for over one year ........................... 2,000
Collections on annuity contract he purchased from Great Life Insurance .. 5,400
Social Security benefits ....................................................................................... 14,000
Rent income on townhouse ................................................................................ 9,000
The cost of the annuity was $46,800, and Cecil was expected to receive a total of 260 monthly payments of $450. Cecil has received 22 payments through 2017.
Cecil’s 40-year-old daughter, Sarah C. Seymour, borrowed $60,000 from Cecil on January 2, 2017. She used the money to start a new business. Cecil does not charge her interest because she could not afford to pay it, but he does expect to collect the principal eventually. Sarah is living with Cecil until the business becomes profitable. Except for housing, Sarah provides her own support from her business and $1,600 in dividends on stocks that she inherited from her mother.
Other relevant information is presented below:
• Expenses on rental townhouse:
Utilities .............................................. $2,800
Maintenance .................................... 1,000
Depreciation .................................... 2,000
Real estate taxes ............................. 750
Insurance ......................................... 700
• State income taxes paid: $3,500
• County personal property taxes paid: $2,100
• Payments on estimated 2016 Federal income tax: $5,900
• Charitable contributions of cash to Alto Baptist Church: $6,400
• Federal interest rate: 6%
• Sales taxes paid: $912
Compute Cecil’s 2017 Federal income tax payable (or refund due).

Stocks
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An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...