This is an interesting assignment. I have not done anything of a collaborative discussion before. I feel that the more posts I read the greater the variety of answers. I think that most of the questions revolve around the rental income and expenses and the partnership distribution. This is what I have come up with so far. Feel free to comment or point me it the right direction. Anyway, here goes...

Total Salary$110,000

Bank Interest$3500

Part-time Consultant income$7200

Rent income$7000

Insurance$500

Partnership Income$30000

Dividends$2000__________

Total income$160700

Minus rent expense-7000 (passive loss)

$153200

Itemized Deductions-$16000

Dependent Exemptions-$18250_ (3650x5) ___

$118950

Partnership Distribution$10000 should already be taxed

Municipal bond interest$1500 is excluded

Gift for Danny's parents$15000 not taxable as it meets the threshold.

Loan from Danny's parents$5000 not taxable

Insurance$500 -There are no tax consequences if the total amount of such policies does not exceed $50,000. The imputed cost of coverage in excess of $50,000 must be included in income, using the IRS Premium Table, and are subject to social security and Medicare taxes.I am assuming that the $500 is over that $50000 threshold.

Use this topic to work collaboratively on the resolution of this problem. How you divide the work to accomplish the task is up to you. You should not use email or other forms of communication to resolve this problem, as participation counts and I will monitor this topic for your participation. I anticipate you will use the IRS website for reference to publications or forms.