Rick, a single taxpayer, owns 30,000 shares of qualifying small business stock that he had purchased for $300,000. During the current year, he sells 10,000 of the shares for $25,000. What are the tax effects for Rick from selling the shares?

a. Assume that Rick also sells other capital assets at a gain of $12,000. What are the tax effects of Rick’s capital asset transactions?

b. Assume the same facts as in part a. In the year after selling the 10,000 shares of qualified small business stock, Rick has total capital gains of $16,000 and total capital losses of $12,000. What are the effects of Rick’s capital asset transactions on his taxable income?