Western Corporation reports the following results for the current year:
Gross profits on sales ……………………………………..$150,000
Long-term capital gain …………………………………… 8,000
Long-term capital loss ……………………………………. 15,000
Short-term capital gain …………………………………… 10,000
Short-term capital loss …………………………………… 2,000
Operating expenses ……………………………………….. 61,000
a. What are Western’s taxable income and income tax liability for the current year, assuming qualified production activities income is $89,000?
b. How would your answers to Part a change if Western’s short-term capital loss is $5,000 instead of $2,000?