Elk, a C corporation, has $370,000 operating income and $290,000 operating expenses during the current year. In addition, Elk has a $10,000 long-term capital gain and a $17,000 short-term capital loss. Elk's taxable income is:
A) $63,000.
B) $73,000.
C) $80,000.
D) $90,000.
E) None of these.

Question

Quizplus · Accepted Answer

Elk's taxable income is calculated as operating income ($370,000) minus operating expenses ($290,000), resulting in $80,000. The net capital loss ($17,000 short-term loss - $10,000 long-term gain = $7,000 loss) is not deductible against ordinary income for a C corporation, so it does not affect taxable income.

Elk, a C Corporation, Has $370,000 Operating Income and $290,000