Question :

Mason Phillips, age 45, and his wife, Ruth, live at 230 Wood Lane, Salt Lake City, UT 84101. Mason's Social Security number is 111-11-1111. Ruth's Social Security number is 123-45-6789. Ruth and Mason are cash basis taxpayers and had the subsequent items for 2012:

• Salary of $140,000.
• Bad debt of $30,000 from uncollected rent.
• Collection of unpaid rent from a prior year of $6,000.
• Sale of § 1244 stock resulting in a loss of $105,000. The stock was acquired eight months ago.
• Rental income of $60,000.
• Rental expenses of $33,000.
• Casualty loss on rental property of $10,000.
• Personal casualty loss (from one event) of $20,000.
• Theft loss of $5,000 on a computer used 100% associated with their jobs.
• Theft loss of $8,000 on a painting held for investment.
• Other itemized deductions of $18,000.
• Federal income tax withheld of $3,000. Compute Mason and Ruth's 2012 Federal income tax payable (or refund due).