Lois, who is single, received $9,000 of Social Security benefits.She also received $30,000 from dividends, interest, and her employer's pension plan.If Lois sells a capital asset that produces a $1,000 recognized loss, Lois's taxable income will decrease by less than $1,000.

Question

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The $1,000 recognized loss from selling a capital asset will offset $1,000 of Lois's other income (dividends, interest, pension) for tax purposes. Therefore, Lois's taxable income will decrease by exactly $1,000.

Lois, Who Is Single, Received $9,000 of Social Security Benefits