Determine taxable income from the information

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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.

Harvey's salary

$45,000

Betty's 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)

Harvey's business income (moonlighting)

7,700

Harvey's business deductions 
(before home office expenses)

22,000

Harvey's home office expenses

10,500

Net loss on rental property

(31,000)

Federal Income tax withheld

9,600

Reference no: EM131796999

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