PART 1. Brad and Angie are married and wish to file a joint return for 2013. They have one dependent child, Shiloh (age 15), who lives with them. Brad and Angie have the following items of income and expense for 2013:

Income:
Brad's salary $115,000
Angie's salary 125,000
Interest income on State of Arizona bonds 3,000
Interest income on US Treasury bonds 8,000
Qualified cash dividends 6,000
Regular (nonqualified) cash dividends 8,500
FMV of shares received from stock dividend 5,000
Share of Hollywood Partnership loss* (12,000)
Share of Rodeo Corporation (an electing S corporation) income** 30,000
Life insurance proceeds received on the death of Brad's mother 100,000
Short-term capital gains 6,000
Short-term capital losses (10,000)
25% Long-term capital gains 18,000
15% Long-term capital gains 30,000
15% Long-term capital losses (5,000)

Expenses:
Home mortgage interest ($250,000 principal) 15,000
Home equity loan interest ($120,000 principal) 9,600
Houseboat loan interest ($50,000 principal), fully equipped 5,000
Car loan interest 3,000
Home property taxes 5,000
Houseboat taxes (ad valorem) 1,200
Car tags (ad valorem part) 500
Arizona income tax withheld 13,000
Federal income taxes withheld 45,000
Arizona sales taxes paid 9,500
Medical insurance premiums (not part of an employer plan) 12,000
Unreimbursed medical bills 10,000
Charitable contributions 13,500

* Brad and Angie invested $10,000 as general partners in the Hollywood Partnership at the beginning of 2013. The loss is not the result of real estate rentals. Neither Brad nor Angie materially participate.
** Angie is a 50% owner and President of Rodeo. She materially participates in the corporation.

REQUIRED: Determine Brad and Angie's tax liability, using the tax formula. You must label your work, provide supporting schedules for summary computations, and indicate any carryovers. Present your work in a neat, orderly fashion.

PART 2. Brad and Angie have purchased several U.S. savings bonds in Shiloh's name for college savings. Shiloh is recognizing all interest on the bonds under the accrual method. During 2013, the bonds earned $3,000 of taxable interest. Shiloh also earned $900 from babysitting.

REQUIRED: Determine Shiloh' tax liability, using the tax formula.