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

Wages	$	340,000
Federal withholding		76,800
Social security wages		118,500
Social security withholding		7,347
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 2016. 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.)