Note: This problem is for the $2018$ tax year.

Logan B$.$ Taylor is a widower whose wife, Sara, died on June $6,2016.$ He lives at $4680$ Dogwood Lane, Springfield, MO $65801.$ He is employed as a paralegal by a local law firm. During $2018,$ he had the 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 $3,0004,400$

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 $2017$ tax overpayment$)700$

Logan inherited securities worth $$60,000$ from his uncle, Daniel, who died in $2018.$ Logan also was the designated beneficiary of an insurance policy on Daniel's life with a maturity value of $$200,000.$ The lot in St$.$ Louis was purchased on May $2,2013,$ for $$85,000$ and held as an investment. As the neighborhood has deteriorated, Logan decided to cut his losses and sold the lot on January $5,2018,$ for $$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 $2018$ include the following:

Medical expenses $($including $$10,500$ for dental$)$ $$11,500$

Taxes$$

State of Missouri income tax $($includes withholdings during $2018)$ $$4,200$

Property taxes on personal residence $4,5008,700$

Interest on home mortgage $($Boone State Bank$)5,600$

Contribution to church $($paid pledges for $2018$ and $2019)4,800$

Logan and his dependents are covered by his employer's health insurance policy for all of $2018.$ However, he is subject to a deductible, and dental care is not included. The $$10,500$ dental charge was for Helen's implants. Helen is Logan's widowed mother, who lives with him $($see below$).$ Logan normally pledges $$2,400($$$200$ per month$)$ each year to his church. On December $5,2018,$ upon the advice of his pastor, he prepaid his pledge for $2019.$

Logan's household, all of whom he supports, includes the following:

Social Security Number Birth Date

Logan Taylor $($age $48)123-45-678708/30/1970$

Helen Taylor $($age $70)123-45-678001/13/1948$

Asher Taylor $($age $23)123-45-678307/18/1995$

Mia Taylor $($age $22)123-45-678402/16/1996$

Helen receives a modest Social Security benefit. Asher, a son, is a full$-$time student in dental school and earns $$4,500$ as a part$-$time dental assistant. Mia, a daughter, does not work and is engaged to be married.

Pbart $1-$ Tax Computation

Using the appropriate forms and schedules, compute Logan's income tax for $2018.$ Federal income tax of $$4,500$ was withheld from his wages. If Logan has any over$-$payment on his income tax, he wants the refund sent to him. Assume that the proper amounts of Social Security and Medicare taxes were withheld. Logan does not want to contribute to the Presidential Election Campaign Fund.

Part $2-$ Follow$-$Up Advice

In early $2019,$ the following take place:

$1.$ Helen decides that she wants to live with one of her daughters and moves to Arizona.

$2.$ Asher graduates from dental school and joins an existing practice in St$.$ Louis.

$3.$ Mia marries, and she and her husband move in with his parents.

$4.$ Using the insurance proceeds he received on Daniel's death, Logan pays off the mortgage on his personal residence.

Logan believes that these events may have an effect on his tax position for $2019.$ Therefore, he requests your advice.

Write a letter to Logan explaining in general terms the changes that will occur for tax purposes. Assume that Logan's salary and other factors not mentioned $($e$.$g$.,$ property and state income taxes$)$ will remain the same. Use the $2018$ Tax Rate Schedules and standard deduction amounts in projecting Logan's tax for $2019.$