Cecil C. Seymour is a 64-year-old widower. He had income for 2018 as follows: Pension from former...

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Cecil C. Seymour is a 64-year-old widower. He had income for2018 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 year2,000
Collections on annuity contract he purchased from Great LifeInsurance 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 toreceive a total of 260 monthly payments of $450. Cecil has received22 payments through 2017. Cecil’s 40-year-old daughter, Sarah C.Seymour, borrowed $60,000 from Cecil on January 2, 2017. She usedthe money to start a new business. Cecil does not charge herinterest because she could not afford to pay it, but he does expectto collect the principal eventually. Sarah is living with Ceciluntil the business becomes profitable. Except for housing, Sarahprovides her own support from her business and $1,600 in dividendson stocks that she inherited from her mother. Other relevantinformation 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 2018 Federal income tax payable (or refunddue).

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WN1 Cost of Annuity 46800 Monthly Payments 450 Number of Monthly Payments 260 Exclusion percentage of annuity 40 contract cecil purchased cost of annuity monthly paymentsno of payments 46800450260 Annuity received from group 5400 insurance Annual Exclusion on annuity contract 2160 annuity receivedexclusion 540040 Annuity Payment included in See Answer

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Cecil C. Seymour is a 64-year-old widower. He had income for2018 as follows:Pension from former employer $39,850Interest income from Alto National Bank 5,500Interest income on City of Alto bonds 4,500Dividends received from IBM stock held for over one year2,000Collections on annuity contract he purchased from Great LifeInsurance 5,400Social Security benefits 14,000Rent income on townhouse 9,000The cost of the annuity was $46,800, and Cecil was expected toreceive a total of 260 monthly payments of $450. Cecil has received22 payments through 2017. Cecil’s 40-year-old daughter, Sarah C.Seymour, borrowed $60,000 from Cecil on January 2, 2017. She usedthe money to start a new business. Cecil does not charge herinterest because she could not afford to pay it, but he does expectto collect the principal eventually. Sarah is living with Ceciluntil the business becomes profitable. Except for housing, Sarahprovides her own support from her business and $1,600 in dividendson stocks that she inherited from her mother. Other relevantinformation is presented below: • Expenses on rental townhouse:Utilities $2,800Maintenance 1,000Depreciation 2,000Real estate taxes 750Insurance 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: $912Compute Cecil’s 2018 Federal income tax payable (or refunddue).