If the $1 is ordinary income, it goes to the "front of the line", pushing $1 of the LTCG to the 15% tax rate. That is, the $1 is taxed at 15% (LTCG rate) not 22% (the ordinary income rate). Another way to look at it is: your standard deduction first offsets ordinary income before it offsets LTCG. After that ordinary income is taxed before LTCG.
