Jeff is a coin collector who owns several valuable sets of coins. He sold one of the sets of coins on January 27, 2016 for $4,500,000. He had acquired the set three years earlier for $3,900,000.

On February 23, 2016, Jeff sold a block of stock for $630,000 that he had purchased in 1996 for $230,000. On April 6, 2016 Jeff sold another block of stock for $165,000. He had bought these shares on July 20, 2015 for $265,000. The coin set and the two blocks of stock were the only assets that Jeff sold in 2016. No adjustments in basis have been made to any of the assets that Jeff sold in 2016. Jeff is not a dealer in stocks or in coins.

Jeff's only other income in 2016 (other than gains on the sales of assets) was a salary of $300,000 and rental income (net of expenses) of $100,000. He is single with no dependents and he does not itemize his deductions.

a. Compute Jeff's recognized gains or losses on the coins and the two blocks of stock. Indicate the character of the gains and losses (ordinary or capital)

b. Compute Jeff's taxable income for 2016, recalling that the deduction for personal exemptions is fully phased out for a person with Jeff's level of income.

c. Compute Jeff's income tax for 2016 taking into account the fact that some of the gains on the asset sales will be taxed at special lower rates.