John and Ellen Brire are married and file a joint return. They have no dependents. John owns an unincorporated specialty electrical lighting retail store, Brite-On. Brite-On had the following assets on January I, 2018:

Assets	Cost
Old store building purchased April 1, 2003	$100,000
Equipment (7-year recovery) purchased January 10,2013	30,000
Inventory valued using FIFO method: 4,000 light bulbs	$5/bulb

BikesOn purchased a competitor's store on March 1, 2018, for $206,000. The purchase price included the following:

New store building	$115,000 (FMV)
Land	28,000 (FMV)
Equipment (5-year recovery)	45,000 (FMV)
Inventory: 3,000 light bulbs	$ 6/bulb (cost)

On June 30, 2018, kite-On sold the 7-year recovery period equipment for $12,000. Brice-On leased a car for $860/month beginning on June 1, 2018. The car is used 100% for business and was driven 14,000 miles during the year. Brine-On sold R,000 light bulk at a price of 415/hulb during the year. Also, Brice-On made additional purchases of 4,000 light bulbs in August 2018 at a cost of $7/bulb. Brite-On had the following revenues (in addition to the sales of light bulbs) and additional expenses:

Medical bills	$94,000
Real property taxes	6,000
State income taxes	4,000
Home mortgage interest	3,000
Charitable contributions (cash)	2,000
Medical bills	36,000

John and Ellen also had some personal expenses:

Medical bills	$4,500
Real property taxes	3,500
State income taxes	5,500
Home mortgage interest	5,500
Charitable contributions (cash)	2,500
Medical bills	$4,500

Ellen receives $42,000 of wages from employment elsewhere, from which $4,000 of fed-eral income taxes were withheld. The kites received interest income on a bank savings account of $275 and qualified dividends of $1,425. John and Ellen made four $3,900 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 2013: The Brites elected out of bonus depreciation and did not elect Sec. 179.

• Equipment acquired in 2018: 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 deduct-ible lease expense by $41.

Compute the Brite's taxable income and balance due or refund for 2018.