Harold has a 50% interest in a general partnership that has a $14,000 loss for the year. He materially participates in the partnership, his basis in the partnership is $10,000 at the beginning of the year. He also has salary from other employment of $46,200. If he is single and claims the standard deduction, what are his taxable income and tax liability, respectively, in 2019?

This is the solution Taxable income = $27,000 and the tax liability is $3,046. Taxable income = $46,200 - $7,000 partnership loss (50% x $14,000) - $12,200 standard deduction = $27,000. Tax Liability: [($27,000 - $9,700) x 12%] + $970 = $3,046. Harold has sufficient basis to deduct the loss in the current year. But my question is how do you get $9700 and 12%from and 970?