Reference no: EM132629170
Question - Tax Computation Problem Cecil C. Seymour is a 64-year-old widower. He had income for 2019 as follows:
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Pension from former employer
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$39,850
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Interest income from Alto National Bank
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5,500
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Interest income on City of Alto bonds
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4,500
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Dividends received from IBM stock held for over one year
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2,000
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Collections on annuity contract he purchased from Great Life Insurance
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5,400
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Social Security benefits
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14,000
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Rent income on townhouse
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9,000
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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 2019. Cecil's 40-year-old daughter, Sarah C. Seymour, borrowed $60,000 from Cecil on January 2, 2019. 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 2018 Federal income tax: $5,900
Charitable contributions of cash to Alto Baptist Church: $7,400
Federal interest rate: 6%
Sales taxes paid: $912
Required - Compute Cecil's 2019 Federal income tax payable (or refund due).