Note: This problem is for the 2023 tax year.

Daniel B. Butler and his spouse Freida C. Butler file a joint return. The Butlers live at 625 Oak Street in Corbin, KY 40701. Dan's Social Security number is 111-11-1112, and Freida's is 123-45-6780. Dan was born on January 15, 1972, and Freida was born on August 20, 1972.

During 2023, Dan and Freida furnished over half of the total support of each of the following individuals, all of whom still live at home:

1. Gina, their daughter, age 22, a full-time student, who married on December 21, has no income of her own and did not file a joint return with her husband, Casey, who earned $10,600 during 2023. Gina's Social Security number is 123-45-6788.
2. Willie, their son, age 19, graduated high school in May 2023. He is taking a leap year and will not begin college until 2024. He had gross income of $6,300 in 2023. Willie's Social Security number is 123-45-6787.
3. Ben, their oldest son, age 26, is a full-time graduate student with gross income of $5,200. Ben's Social Security number is 123-45-6786.

Dan was employed as a manager by WJJJ, Inc. (employer identification number 11-1111111, 604 Franklin Street, Corbin, KY 40702), and Freida was employed as a salesperson for Corbin Realty, Inc. (employer identification number 98-7654321, 899 Central Street, Corbin, KY 40701). Selected information from the W-2 forms provided by the employers is presented below. Dan and Freida use the cash method.

Line	Description	Dan	Freida
1	Wages, tips, other compensation	$74,000	$86,000
2	Federal income tax withheld	11,000	12,400
17	State income tax withheld	2,960	3,440

Freida sold a house on December 30, 2023, and will be paid a commission of $3,100 (not included in the $86,000 reported on the W-2) on the January 10, 2024, closing date.

Other income (as reported on 1099 Forms) for 2023 consisted of the following:

Dividends on CSX stock (qualified)		$4,200
Interest on savings at Second Bank		1,600
Interest on City of Corbin bonds		900
Interest on First Bank CD		382

The $382 from First Bank was an original issue discount. Dan and Freida collected $16,000 on the First Bank CD that matured on September 30, 2023. The CD was purchased on October 1, 2020, for $14,995, and the yield to maturity was 3.3%.

Dan participated on a game show and won a cash prize of $7,000.

In addition to the above information, Dan and Freida's itemized deductions included the following:

Paid on 2023 Kentucky income tax		$700
Personal property tax paid		600
Real estate taxes paid		1,800
Interest on home mortgage (Corbin S&L)		4,900

Sales tax from the sales tax table is $1,860. Dan and Freida made Federal estimated tax payments of $6,000. They have never owned or used any digital assets, and they do not wish to contribute to the Presidential Election Campaign. The Kentucky income tax rate is 4%.

Required:

Compute Dan and Freida's 2023 Federal income tax payable (or refund due). Use Form 1040 and Schedules 1, B, 8812 and the Qualified Dividends and Capital Gain Tax Worksheet to complete this tax return. If there is a tax overpayment, the Butlers would like a refund. If additional tax is due, assume no underpayment penalty applies.

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

• Enter all amounts as positive numbers.
• If an amount box does not require an entry or the answer is zero, enter "0".
• When computing the tax liability, do not round your immediate calculations.
• If required, round your answers to the nearest dollar.
• Make realistic assumptions about any missing data.
• Use the Tax Rate Schedule provided. Do not use the Tax Tables.

Qualified Dividends and Capital Gain Tax Worksheet

Question Content Area

The worksheet will assist you in determining the tax liability.If an amount is zero, enter "0".

Use the 2023 Tax Rate Schedule provided. Do not use the Tax Tables.

Qualified Dividends and Capital Gain Tax WorksheetLine 16

Keep for Your Records

Before you begin:		See the earlier instructions for line 16 to see if you can use this worksheet to figure your tax.
	Before completing this worksheet, complete Form 1040 through line 15.
	If you do not have to file Schedule D and you received capital gain distributions, be sure you checked the box on Form 1040 or 1040-SR, line 7.

1.	Enter the amount from Form 1040 or 1040-SR, line 15. However, if you are filing Form 2555 (relating to foreign earned income), enter the amount from line 3 of the Foreign Earned Income Tax Worksheet(Taxable income)
1.	fill in the blank a514fcff0072f87_1
2.	Enter the amount from Form 1040 or 1040-SR, line 3a* . . . . . . . .	2.	fill in the blank a514fcff0072f87_2
3.	Are you filing Schedule D?*
	Yes	Enter thesmallerof line 15 or 16 of Schedule D. If either line 15 or line 16 is blank or a loss, enter -0-
3.	fill in the blank a514fcff0072f87_3
	No	Enter the amount from Form 1040 or 1040-SR, line 7.
4.	Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4.	fill in the blank a514fcff0072f87_4
5.	Subtract line 4 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . .	5.	fill in the blank a514fcff0072f87_5
6.	Enter:
	$41,675 if single or married filing separately,
	$83,350 if married filing jointly or qualifying widow(er),	. . . . . . . . . . .	6.	fill in the blank a514fcff0072f87_6
	$55,800 if head of household.
7.	Enter the smaller of line 1 or line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7.	fill in the blank a514fcff0072f87_7
8.	Enter the smaller of line 5 or line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8.	fill in the blank a514fcff0072f87_8
9.	Subtract line 8 from line 7. This amount is taxed at 0% . . . . . . . . . . . . . . . . . . . . . . .	9.	fill in the blank a514fcff0072f87_9
10.	Enter the smaller of line 1 or line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10.	fill in the blank a514fcff0072f87_10
11.	Enter the amount from line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11.	fill in the blank a514fcff0072f87_11
12.	Subtract line 11 from line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12.	fill in the blank a514fcff0072f87_12
13.	Enter:
	$459,750 if single,
	$258,600 if married filing separately,	. . . . . . . . . . .	13.	fill in the blank a514fcff0072f87_13
	$517,200 if married filing jointly or qualifying widow(er),
	$488,500 if head of household.
14.	Enter the smaller of line 1 or line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14.	fill in the blank a514fcff0072f87_14
15.	Add lines 5 and 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15.	fill in the blank a514fcff0072f87_15
16.	Subtract line 15 from line 14. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . .	16.	fill in the blank a514fcff0072f87_16
17.	Enter the smaller of line 12 or line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17.	fill in the blank a514fcff0072f87_17
18.	Multiply line 17 by 15% (0.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18.	fill in the blank a514fcff0072f87_18
19.	Add lines 9 and 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19.	fill in the blank a514fcff0072f87_19
20.	Subtract line 19 from line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20.	fill in the blank a514fcff0072f87_20
21.	Multiply line 20 by 20% (0.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21.	fill in the blank a514fcff0072f87_21
22.	Figure the tax on the amount on line 5. If the amount on line 5 is less than $100,000, use the Tax Table to figure the tax. If the amount on line 5 is $100,000 or more, use the Tax Computation Worksheet . . . . . . . . . . . . . . . .
22.	fill in the blank a514fcff0072f87_22
23.	Add lines 18, 21, and 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23.	fill in the blank a514fcff0072f87_23
24.	Figure the tax on the amount on line 1. If the amount on line 1 is less than $100,000, use the Tax Table to figure the tax. If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet . . . . . . . . . . . . . . . .
24.	fill in the blank a514fcff0072f87_24
25.	Tax on all taxable income.Enter thesmallerof line 23 or 24. Also include this amount on the entry space on Form 1040 or 1040-SR, line 16. If you are filing Form 2555, don't enter this amount on the entry space on Form 1040 or 1040-SR, line 16. Instead, enter it on line 4 of the Foreign Earned Income Tax Worksheet . . . . . . . . . . . .
25.	fill in the blank a514fcff0072f87_25
*If you are filing Form 2555, see the footnote in the Foreign Earned Income Tax Worksheet before completing this line.

2023 Tax Rate Schedules

Question Content Area

Use the 2023 Tax Rate Schedules to compute the tax.(Note: Because the tax rate schedules are used instead of the tax tables, the amount of tax computed may vary slightly from the amount listed in the tables.)

2023 Tax Rate Schedules
SingleSchedule X	Head of householdSchedule Z
If taxable income is: Over		But not over		The tax is:		of the amount over			If taxable income is: Over		But not over		The tax is:		of the amount over
$ 0		$ 11,000		. . . . . .	10%		$ 0			$ 0		$ 15,700		. . . . . .	10%		$ 0
11,000		44,725		$ 1,100.00	+	12%		11,000			15,700		59,850		$ 1,570.00	+	12%		15,700
44,725		95,375		5,147.00	+	22%		44,725			59,850		95,350		6,868.00	+	22%		59,850
95,375		182,100		16,290.00	+	24%		95,375			95,350		182,100		14,678.00	+	24%		95,350
182,100		231,250		37,104.00	+	32%		182,100			182,100		231,250		35,498.00	+	32%		182,100
231,250		578,125		52,832.00	+	35%		231,250			231,250		578,100		51,226.00	+	35%		231,250
578,125		. . . . . .		174,238.25	+	37%		578,125			578,100		. . . . . .		172,623.50	+	37%		578,100
Married filing jointly or Qualifying widow(er)Schedule Y-1	Married filing separatelySchedule Y-2
If taxable income is: Over		But not over		The tax is:		of the amount over			If taxable income is: Over		But not over		The tax is:		of the amount over
$ 0		$ 22,000		. . . . . .	10%		$ 0			$ 0		$ 11,000		. . . . . .	10%		$ 0
22,000		89,450		$ 2,200.00	+	12%		22,000			11,000		44,725		$ 1,100.00	+	12%		11,000
89,450		190,750		10,294.00	+	22%		89,450			44,725		95,375		5,147.00	+	22%		44,725
190,750		364,200		32,580.00	+	24%		190,750			95,375		182,100		16,290.00	+	24%		95,375
364,200		462,500		74,208.00	+	32%		364,200			182,100		231,250		37,104.00	+	32%		182,100
462,500		693,750		105,664.00	+	35%		462,500			231,250		346,875		52,832.00	+	35%		231,250
693,750		. . . . . .		186,601.50	+	37%		693,750			346,875		. . . . . .		93,300.75	+	37%		346,875