Which of the following statements is not correct with respect to the taxation of capital gains?

a.In any year, only $3,000 of net capital losses can be deducted against ordinary income.

b.Short-term capital gains have preferential tax rates.

c.Long-term gains have preferential tax rates of 0 percent, 15 percent, and 20 percent for most taxpayers.

d.Long-term capital gains are taxed at a lower rate than ordinary income.

Tax law is a tool used by government to:

a.Raise revenue to run government

b.Support research and development

c.Encourage social objectives

d.Further economic goals

e.All of these choices are correct.

Mark, 67, and Nina, 61, are married and have no dependent children. Their gross income is $50,000 and they have itemized deductions of $27,000. Their taxable income is:

a.$23,400

b.$38,000

c.$24,700

d.$23,000

Alan bought shares in Coca-Cola for $10,000 on November 15, 2018. On November 1, 2019, he sold the shares for $5,000. He has no other gains or losses in 2019. What does Alan report on his tax return?

a.$3,000 ordinary loss and $2,000 long-term loss carry-forward

b.$3,000 ordinary loss and $2,000 short-term loss carry-forward

c.$5,000 short-term loss

d.$5,000 long-term loss