During 2008,Sparrow Corporation,a calendar year C corporation,had operating income of $425,000,operating expenses of $210,000,a short-term capital loss of $45,000,and a long-term capital gain of $125,000.How much is Sparrow's tax liability for 2008?
A)$67,100.
B)$79,100.
C)$98,300.
D)$103,250.
E)None of the above.

Question

Quizplus · Accepted Answer

Sparrow's taxable income is $295,000 [$425,000 operating income - $210,000 operating expenses + $80,000 net capital gain ($125,000 long-term capital gain - $45,000 short-term capital loss)].Corporate income tax on taxable income of $295,000 is $98,300: 11ea7f05_2e4d_8ebf_92e1_c5ebaf0eaa39_TB4123_00 Corporations do not receive a preferential tax rate on long-term capital gains.

During 2008,Sparrow Corporation,a Calendar Year C Corporation,had Operating Income of $425,000,operating