Bill and Donnaare in the 39.6% tax bracket for ordinary income and the 20% bracket for capital gains (ignore the 3.8% additional tax on investment income for higher-income taxpayers.) They have owned several blocks of stock for many years. They are considering the sale of two blocks of stock. The sale of one block would produce a gain of $9,000.The sale of the other would produce a loss of $19,000.For purposes of thisproblem, ignore personal exemptions, itemized deductions and other phase-outs. They have no other gains or losses this year.

Requirements

a.	How much tax will they save if they sell the block of stock that produces a loss?
b.	How much additional tax will they pay if they sell the block of stock that produces a gain?
c.	What will be the impact on their taxes if they sell both blocks of stock?