Howard Gartman is a 40% partner in the Horton & Gartman Partnership. During 2016, the partnership reported the total items below (100%) on its Form 1065:

Howard and his wife Dawn, who file a joint return, also had the following income and deductions from sources not connected with the partnership:

Howard and Dawn have two dependent children. During 2016, Dawn had $4,500 in federal income taxes withheld from her salary and Howard made four estimated tax payments of $2,500 each ($10,000 total). Compute Howard and Dawn€™s Federal income tax liability for 2016 and whether they have a balance due or a tax refund. Ignore the child tax credits and the election to take state sales tax as an itemized deduction.

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Ordinary income Qualified dividends Long-term capital loss Long-term capital gain Charitable contributions Cash distributions to partners $180,000 10,000 (12,000) 28,000 4,000 150,000 Income Dawn's salary Qualified dividends $40,000 3,000 Deductions Mortgage interest Real estate taxes Charitable contributions 9,000 3,800 1,000