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. For 2019, he reported die 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 2018 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. Because 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) | 4,600 | |||
| Contribution to church (paid pledges for 2019 and 2020) | 4,800 |
