Newt Corporation Is Subject to Tax Only in State A Generated

Newt Corporation is subject to tax only in State A.Newt generated the following income and deductions. $$\begin{array} { l l } \text { Federal taxable income } & \$ 500,000 \\\text { State A income tax expense } & 40,000 \\\text { Depreciation allowed for Federal tax purposes } & 160,000 \\\text { Depreciation allowed for state tax purposes } & 225,000\end{array}$$ Federal taxable income is the starting point in computing State A taxable income and state income taxes are not deductible for state tax purposes.Newt's State A taxable income is:

A) $475,000.
B) $500,000.
C) $540,000.
D) $565,000.
E) $605,000.