Question

The question takes up the entire page, so I took two separate photos of it. It is a tax accounting question.

on and Basic Tax Model 45. 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. For 2018, he reported the following receipts. Salary $ 80,000 Interest income Money market account at Omni Bank $ 300 Savings account at Bosne State Bank 1,100 City of Springfield general purpose bonds 3,000 4,400 Inheritance from Daniel 60,000 Life insurance proceeds 200,000 Amount from sale of St. Louis lot 80,000 Proceeds from estate sale 9,000 Federal income tax refund (for 2017 tax overpayment) 700 In 2018, Logan inherited securities worth $60,000 from his deceased uncle, Daniel. 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 prop- erty 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 other 2018 expenditures include the following Medical expenses (including $10,500 for dental services) $11,500 Taxes State of Missouri income tax (includes withholdings) $4,200 Property taxes on personal residence 4,500 8,700 Interest on home mortgage 5,600 Contribution to church (paid pledges for 2018 and 2019) 4,800 Logan and his dependents were covered by his employer's health insurance 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 loman's

Answer 1

0 Interest on state and local bonds is excluded from gross income 9 Inheritances are excluded from gross income. (3) Life insurance proceeds are non taxable. (H) Logan has a realized long-term capital loss of $5000 [$80,000 (selling price) ~ 85000 (cost basis) from the sale of the lot. Absent! any offsetting Capital gains, however, he can deduct only $3,000 agnaist ordinary income. The $2,000 unabsorbed capital loss can be carried over to 2018 The basis of the property inherited is its for market value on the date of the decedent's death. The basis of any other property that was sold is its cost. Consequently, the estale sale most likely resulted in a realized lose. Because the loss is personal, it cannot be recognized. Thus, the estate sale results in no income tax consequences (6) A Federal income tax refund is a return of a nondeductible expenditure and therefore, is non taxable. 6) Charitable contributions core deductible in the year paid ($ 2,400+ $2,400 $4,800). Therefore the year for which they were pludged doesn't matter . Helen and Mia meet the qualifying relative teste. Asher is a qualifying child, so he is not subject to the gross income test. Logan is a Surviving spouse for filling purposes. (9)