Note: This problem is for the $2022$ tax year.

Devon Bishop, age $45,$ is single. He lives at $1507$ Rose Lane, Albuquerque, NM $87131.$ His Social Security number is $111-11-1117.$ Devon did not engage in any digital asset transactions during the year, and he does not want $$3$ to go to the Presidential Election Campaign Fund.

Devon's wife, Ariane, passed away in $2018.$ Devon's son, Tom, who is age $18,$ resides with Devon. Tom's Social Security number is $123-45-6788.$

Devon owns a sole proprietorship for which he uses the accrual method of accounting and maintains no inventory; the business operates as Devon$$s Copy Shop, $422$ E$.$ Main Street, Albuquerque, NM $87131,$ IRS business activity code: $459990.$ His revenues and expenses for $2022$ are as follows.

Sales revenue $$740,000$

Cost of goods sold $($based on purchases for the year$)405,000$

Salary expense $88,000$

Rent expense $30,000$

Utilities $8,000$

Telephone $6,500$

Advertising $4,000$

Bad debts $5,000$

Depreciation$*21,000$

Health insurance$**26,000$

Accounting and legal fees $7,000$

Supplies $1,000$

$*$New office equipment $($$$21,000)$; Devon chose to use the immediate expense election.

$**$Other income received by Devon includes the following $$18,000$ for employees and $$8,000$ for Devon.

Other income received by Devon includes the following.

Dividend income $($qualified dividends$)$:

Swan, Inc. $$10,000$

Wren, Inc. $2,000$

Interest income:

First National Bank $11,000$

Second City Bank $2,500$

County of Santa Fe$,$ NM bonds $17,000$

During the year, Devon and his sole proprietorship were involved in the following property transactions. Stock transactions were reported to Devon on Form $1099$B; basis was not reported to the IRS.

Sold Blue, Inc. stock for $$45,000$ on March $12,2022.$ He had purchased the stock on September $5,2019,$ for $$50,000.$

Received an inheritance of $$300,000$ from his uncle, Henry. Devon used $$200,000$ to purchase Green, Inc. stock on May $15,2022,$ and invested $$100,000$ in Gold, Inc. stock on May $30,2022.$

Received Orange, Inc. stock worth $$9,500$ as a gift from his aunt, Jane, on June $17,2022.$ Her adjusted basis for the stock was $$5,000.$ No gift taxes were paid on the transfer. Jane had purchased the stock on April $1,2016.$ Devon sold the stock on July $1,2022,$ for $$22,000.$

On July $15,2022,$ Devon sold one$-$half of the Green, Inc. stock for $$40,000.$

Devon was notified on August $1,2022,$ that Yellow, Inc. stock he purchased from a colleague on September $1,2021,$ for $$52,500$ had become worthless. Although he understood that investing in Yellow was risky, Devon did not anticipate that the corporation would declare bankruptcy.

On August $15,2022,$ Devon received a parcel of land in Phoenix worth $$220,000$ in exchange for a parcel of land he owned in Tucson. Because the Tucson parcel was worth $$245,000,$ he also received $$25,000$ cash. Devon's adjusted basis for the Tucson parcel was $$210,000.$ He originally purchased it on September $18,2019.$

On December $1,2022-,$ Devon sold the condominium in which he had been living for the past $20$ years $(1844$ Lighthouse Lane, Albuquerque, NM $87131)$ and moved into a rented townhouse. The sales price was $$480,000,$ selling expenses were $$28,500,$ and repair expenses related to the sale were $$9,400.$ Devon purchased the condominium for $$180,000.$

Devon's potential itemized deductions, exclusive of the previous information, are as follows.

Medical expenses $($before the $7\mathrm{.}5\%-$of$-$AGI floor$)$ $$9,500$

Property taxes on residence $5,800$

State income taxes $4,000$

Charitable contributions $10,000$

Mortgage interest on residence $($First National Bank$)9,900$

Sales taxes paid $5,000$

During the year, Devon makes estimated Federal income tax payments of $$35,000.$

Required:

Compute Devon's Federal income tax payable or refund due for $2022($assuming that he makes any available elections that will reduce the tax$),$ and complete his tax return using appropriate forms and schedules and the Qualified Dividends and Capital Gain Tax Worksheet.

Make realistic assumptions about any missing data.

If an amount box does not require an entry or the answer is zero, enter $"0".$

Enter all amounts as positive numbers, unless instructed otherwise.

It may be necessary to complete the tax schedules before completing Form $1040.$

When computing the tax liability, do not round your immediate calculations. If required, round your final answers to the nearest dollar.

Use the $2022$ tax rate schedule provided. Do not use the Tax Tables.