1. Jim has the following items for the year: $4,000 of short-term capital gain, $5,000 of 0%/15%/20% long-term capital gain, and $1,500 of 28% capital loss. Which of the following is correct?

   		The $1,500 loss will first be offset by the $5,000 long-term gain
   		The taxpayer will have a net short-term capital loss
   		The $4,000 short-term gain will first be offset by the $5,000 long-term gain
   		The $1,500 loss will first be offset by the $4,000 short-term gain