Subject: Tax lawCourse: 325: ACCOUNTING Logan B. Taylor is a widower whose wife, Sara, died on June 6, 2017. He lives at 4680 Dogwood Lane, Springfield, MO 65801. He is employed as a paralegal by a local law firm. During 2019, he had the following receipts:

Salary

$ 80,000

Interest income—

Money market account at Omni Bank

$300

Savings account at Boone 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 2015 tax overpayment)

700

Logan inherited securities worth $60,000 from his uncle, Daniel, who died in 2019. 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, 2014, for $85,000 and held as an investment. As the neighborhood has deteriorated, Logan decided to cut his losses and sold the lot on January 5, 2019, 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 property 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 expenditures for 2019 include the following:

Medical expenses (including $10,500 for dental)

$11,500

Taxes—

State of Missouri income tax (includes withholdings during 2019)

$4,200

Property taxes on personal residence

4,500

8,700

Interest on home mortgage (Boone State Bank)

5,600

Contribution to church (paid pledges for 2019 and 2020)

4,800

Logan and his dependents are covered by his employer's health insurance policy for all of 2016. 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 Logan's widowed mother, who lives with him (see below). Logan normally pledges $2,400 ($200 per month) each year to his church. On December 5, 2019, upon the advice of his pastor, he prepaid his pledge for 2020.

Logan's household, all of whom he supports, includes the following:

Logan Taylor (age 48)

123-45-6787

08/30/1970

Helen Taylor (age 70)

123-45-6780

01/13/1948

Asher Taylor (age 23)

123-45-6783

07/18/1995

Mia Taylor (age 22)

123-45-6784

02/16/1996

Helen receives a modest Social Security benefit. Asher, a son, is a full-time student in dental school and earns $4,500 as a part-time dental assistant. Mia, a daughter, does not work and is engaged to be married.

Required:

Using the Form 1040, Form 8949 and Schedule A and Schedule D, compute Logan's income tax for 2020. Federal income tax of $4,500 was withheld from his wages. If Logan has any overpayment on his income tax, he wants the refund sent to him. Assume that the proper amounts of Social Security and Medicare taxes were withheld. Logan does not want to contribute to the Presidential Election Campaign Fund.