Question 1: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

In 2021, Ben has the following capital transactions:

LTCG $7,000

LTCG 6,000

STCG 5,000

STCL 10,000

After the netting process, the following results:

A. LTCG of $13,000 and a STCL carryover to 2022 of $3,000

B. LTCL of $8,000

C. LTCL of $5,000

D. LTCG of $13,000 and a STCG of $5,000

E. LTCG of $8,000

Question 2: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

Julia, age 15, is claimed as a dependent by her father. During 2021, Julia received $1,500 in dividends. Her standard deduction is $1,850 ($1,500 + $350).

True or False

Question 3: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

Our tax laws generally encourage taxpayers to keep investment assets that have decreased in value and sell investment assets that have increased in value.

True or False