Sanderson Has the Following Capital Gains and Losses and Qualified

Sanderson has the following capital gains and losses and Qualified dividend income during the current year:
$\begin{array}{lc}\text { Shott-term capital gain } & \$ 6,000 \\\text { Collectibles loss } & (5,000) \\\text { Long-term capital gain } & 1,000 \\\text { Qualified dividend income } & 3,000\end{array}$
If Sanderson's marginal tax rate is 33%,what is the effect of these transactions on his taxable income and income tax liability?
$\begin{array}{llr}&\text { Taxable Income } & \text { Tax Liability }\\\text { a. } & \$ 7,000 \text { increase } & \$ 1,770 \text { increase } \\\text { b. } & \$ 5,000 \text { increase } & \$ 633 \text { increase } \\\text { c. } & \$ 5,000 \text { increase } & \$ 1,650 \text { increase } \\\text { d. } & \$ 5,000 \text { increase } & \$ 750 \text { increase } \\\text { e. } &\$ 5,000 \text { increase } & \$ 1,110 \text { increase }\end{array}$