1. Gary bought 200 shares in a mutual fund for $15 per share two years ago. Shortly after the purchase, the mutual fund went ex-distribution and declared a dividend of $0.50 per share. Gary elected to have dividend distributions from the fund reinvested to purchase additional shares at $15 per share. How much taxable gain will Gary incur if he sells all of his shares this year for $16 per share?

2. For the current year, Brad and Janet, a married couple filing jointly, has a $120,000 long-term loss on the sale of qualifying Section 1244 stock, their only capital asset transaction of the year. Their AGI, before the loss, is $300,000. What is their AGI after taking into account the stock loss?