John and Ellen Brite are married, file a joint return, and are less than 65 years old. They have no dependents and claim the standard deduction. John owns an unincorporated specialty electrical lighting retail store, Brite-On. Brite-On had the following assets on January 1, 2022:

Brite-On purchased a competitor’s store on March 1, 2022, for \($206,000\) The purchase price included the following:

On June 30, 2022, Brite-On sold the 7-year recovery period equipment for \($12,000\).
Brite-On leased a car for \($860/month\) beginning on June 1, 2022. The car is used 100%
for business.
Brite-On sold 8,000 light bulbs at a price of \($15/bulb\) during the year. Also, Brite-On made additional purchases of 4,000 light bulbs in August 2022 at a cost of \($7\) bulb.
Brite-On had the following revenues (in addition to the sales of light bulbs) and additional expenses:

Ellen receives \($42,000\) of wages from employment elsewhere, from which \($4,000\) of federal income taxes were withheld. John and Ellen made four \($3,100\) quarterly estimated tax payments. For self-employment tax purposes, assume John spent 100% of his time at the store while Ellen spends no time at the store.

Additional Facts:
• Equipment acquired in 2017: The Brites elected out of bonus depreciation and did not elect Sec. 179. The half-year convention applies for this property.
• Equipment acquired in 2022: The Brites elected Sec. 179 to expense the cost of the 5-year equipment.
• Assume that the lease inclusion rules require that Brite-On reduce its annual deductible lease expense by \($41\).
Compute the Brite’s taxable income and balance due or refund for 2022.

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Assets Old store building purchased April 1, 2007 Equipment (7-year recovery) purchased January 10, 2017 Inventory valued using FIFO method: 4,000 light bulbs Cost $100,000 30,000 $5/bulb