Alan Has the Following Capital Gains and Losses During the Current

Short Answer

Alan has the following capital gains and losses during the current year:
$\begin{array}{lc}\text {Short-term capital loss } &\$(4,000) \\\text {Collectibles gain } &3,000 \\\text {Long-term capital gain } &8,000\end{array}$
If Alan's marginal tax rate is 33%,what is the effect of the capital gains and losses on his taxable income and income tax liability?
$\begin{array}{cl}\text { Income } & \text { Tax Liability } \\a.\$ 7,000 \text { increase } & \$ 2,310 \text { increase } \\b.\$ 8,000 \text { increase } & \$ 1,840 \text { increase } \\c.\$ 7,000 \text { increase } & \$ 1,400 \text { increase } \\d.\$ 8,000 \text { increase } & \$ 1,200 \text { increase } \\e.\$ 7,000 \text { increase } & \$ 1,050 \text { increase }\end{array}$