Steve Jackson (age 51) is a single taxpayer living at 3215 Pacific Dr., Del Mar, CA 92014. His Social Security number is 465-88-9415. In 2014, Steve’s earnings and income tax withholding as the manager of a local hotel are:

Earnings from the Ocean View Hotel………………………………            $120,000

Federal income tax withheld………………………………………..  18,500

State income tax withheld………………………………………….        9,000

Steve’s other income includes interest from General Electric bonds of $2,500 and interest on a savings account at Wells Fargo Bank of $3,190. Also, Steve received tax-exempt interest of $29,200 on private activity bonds that is subject to alternative minimum tax.

During the year, Steve paid the following amounts (all of which can be substantiated): 

Home mortgage interest…………………………………..    $31,700

Credit card interest……………………………………….     1,760

Auto insurance……………………………………………  900

State income taxes paid in 2014 (for 2012 audit)………...     12,540

Property taxes on personal residence……………………..     6,200

Kaiser HMO premiums…………………………………...     4,800

Other medical expenses…………………………………..     790

CPA fees paid to handle 2012 state audit………………..     7,000

Charitable contributions:

Girl Scouts………………………………………………..     800

San Diego State University (contribution)……………….  10,000

Italian Red Cross…………………………………………     250

Required:

Complete Steve’s federal tax return for 2014. Use Form 1040, Schedule A, Schedule B, and Form 6251, on Pages 6-59 through 6-64. Make realistic assumptions about any missing data.