LO5 Rikki has the following capital gains and losses for the current year:

What is the effect of the capital gains and losses on Rikki’s taxable income and her income tax liability? Assume that Rikki is in the 35% marginal tax rate bracket.

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Short-term capital gain Long-term capital gain $ 1,000 11,000 Long-term capital loss Collectibles gain Collectibles loss 3,000 8,000 2,000