Kurt and Ashley Tallo (SSNs 412-34-5670 and 412-34-5671), married filing jointly, reside at 1901 Princess Ave., Park City, UT 84060. Kurt does not work outside the home. Ashleys W-2 shows the following:

Wages	$ 340,000
Federal withholding	65,000
Social security wages	137,700
Social security withholding	8,537
Medicare withholding	6,190
State withholding	23,800

The Tallos also have the following:

Mortgage interest	$ 12,600
Charitable contributions	$ 10,000

Kurt and Ashley have four passive activities. They received K-1s from four partnerships with the following income or loss on line 1. They are at risk in each activity, so the passive loss rules are the only obstacle.

Activity 1	$ (40,000)
Activity 2	(20,000)
Activity 3	(10,000)
Activity 4	63,000

Prepare Form 1040 for the Tallos for 2020. The taxpayers had qualifying health care coverage at all times during the tax year. You will need Form 1040, Schedule A, Schedule E (page 2), Form 6251, and Form 8582. Do not compute the underpayment penalty, if any. (List the names of the taxpayers in the order in which they appear in the problem. Input all the values as positive numbers. However losses should be indicated by a minus sign. Do not round intermediate computations. Round your final answers to the nearest whole dollar amount. Instructions can be found on certain cells within the forms. The Ratio in Worksheet 5 - Allocation of Unallowed Losses of Form 8582 PG2 and 3 should be entered in 6 decimal place.)

Use the appropriate Tax Tables and Tax Rate Schedules.