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The correct answer is a 22% tax rate with $550 in taxes owed.

Short-term capital gains

Mary has taxable earnings of $40,000 which imply that Mary falls into the tax bracket of capital gains tax of 22% for taxable income between $38,601 and $425,800.

The number of capital gains tax payable is the capital gains itself multiplied by the percentage applicable of 15%, not the entire taxable income since that consisted of other income from other sources aside from capital gains.

22%*$2500=$550

the rationale is that short-term capital gains are taxed at the income tax rate.

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