Trail Corporation has gross profits on sales of $140,000 and deductible expenses of $180,000. In addition, Trail has a net capital gain of $60,000. Trail's taxable income is
A)a $20,000 loss.
B)a $40,000 loss.
C)$60,000.
D)$20,000.

Question

Quizplus · Accepted Answer

Taxable income = Gross profits - Deductible expenses + Net capital gain
Taxable income = $140,000 - $180,000 + $60,000
Taxable income = $20,000 loss
Since taxable income is negative, the answer is D - a $20,000 loss.

Trail Corporation Has Gross Profits on Sales of $140,000 and Deductible