Julia had three capital transactions during the current year: Short-term capital loss of $4,000 Short-term capital gain of $2,000 Long-term capital gain of $3,000 What would be the net effect on Julia's income taxes if she is in the 40% ordinary income tax bracket and 18% long-term capital gain bracket? Group of answer choices $7,000 tax reduction $4,000 tax reduction $1,200 tax reduction $180 tax reduction

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