Peter K. (SSN 621-11-7675) and Kristina E. Wright (SSN 375-04-8753) file a joint return and claim five dependents. During 2020, their regular taxable income and tax liability were as follows:

Salaries		$180,000
Interest income		3,000
Adjusted gross income		$183,000
Itemized deductions:
Charitable contributions	$3,000
State and local property taxes	7,500
State and local income taxes	2,250
Home mortgage interest	17,000	(29,750)
Taxable income		$153,250
Tax liability		$ 25,295

The Wrights received $14,000 of tax-exempt interest from a specified private activity bond purchased in 2005. In addition, Peter paid $5,000 for $125,000 of his employers shares through an incentive stock option.