Angelica has the following capital gains and losses during the current year:

The answer is (b). Please explain how to get these numbers!!!

Short-term capital loss	$(10,000)
Collectibles loss	(4,000)
Long-term capital gain	5,000
Qualified dividend income	10,000

If Angelica's marginal tax rate is 33%, what is the effect of the above transactions on her taxable income and income tax liability?

Income Tax Liability

	a.	$1,000 increase $ 510 increase
	b.	$7,000 increase $ 510 increase
	c.	$1,000 increase $1,050 increase
	d.	$7,000 increase $1,050 increase
	e.	$1,000 increase $ 150 increase

ANSWER:

b