Chad incurred capital gains and losses during the current year. He has a $7,000 net short-term capital gain; a $14,000 long-term capital loss in the 15% category; and a $10,000 long-term capital gain taxed at 28%. How will these transactions be taxed after the gains and losses are combined?

$7,000 will be taxed at taxed at the marginal rate, and the $4,000 excess long-term capital loss will be carried forward.

$3,000 will be taxed at marginal rates.

$3,000 will be taxed at 28%.

$3,000 will be taxed at 15%.