Schatz Corporation generated $8,083,000 ordinary business income and recognized a $73,900 net capital gain on the sale of assets.Which of the following statements is true?
A)Schatz must pay tax at the regular corporate rate on $8,156,900 taxable income.
B)Schatz must pay tax at the regular corporate rate on $8,083,000 taxable income.The $73,900 capital gain is eligible for a preferential tax rate.
C)Schatz's net capital gain results in a permanent book/tax difference.
D)None of the above is true.

Question

Quizplus · Accepted Answer

Schatz must pay tax at the regular corporate rate on the total taxable income of $8,156,900, which includes both ordinary business income and net capital gain.

Schatz Corporation Generated $8,083,000 Ordinary Business Income and Recognized a $73,900