1. Margot and Johnny; calendar year, cash basis taxpayers; file a joint return. Before any of the capital asset transactions below, their taxable income is $90,100 and consists entirely of wages from their current jobs. During the year, they also had the following capital asset transactions:

   • On February 1, 2018, they purchased Wal-Mart common stock for $57,000. They sold the stock on May 31, 2020 for $65,000.
   • On August 15, 2019, they purchased PG&E common stock for $42,000. They sold the stock on July 25, 2020 for $35,000.
   • On April 25,2018, they purchased Cisco common stock for $87,500. They sold the stock on May 21, 2020 for $100,000.

   What is their final taxable income after including the capital asset transactions, and what is their total tax liability?

   		$107,600 taxable income; $14,027 tax liability
   		$103,600 taxable income; $13,427 tax liability
   		$107,600 taxable income; $15,252 tax liability
   		$103,600 taxable income; $11,042 tax liability