Comprehensive Problem (Tax Return Problem). Harvey and Betty Duran, both age 37, are married with one dependent child. Determine their taxable income from the following information for 2013, and their tax liability. Both the ABC and XYZ partnerships are passive activities. Assume dividends are taxed as ordinary income.

Harveys salary	$45,000
Bettys salary	62,000
Dividends received from domestic corporations (nonqualified)	11,000
Interest	7,000
Itemized deductions	6,920
Net loss from ABC Partnership (acq. 1983)	(14,200)
Net loss from XYZ Partnership (acq. 1988)	(6,000)
Harveys business income (moonlighting)	7,700
Harveys business deductions (before home office expenses)	22,000
Harveys home office expenses	10,500
Net loss on rental property	(31,000)
Federal Income tax withheld	9,600