Chou, Who Is in the 37 Percent Marginal Tax Bracket

Chou, who is in the 37 percent marginal tax bracket, is the sole shareholder of Liu Corporation. This year, Liu earned $200,000 of taxable income and distributed $50,000 to Ms. Chou. Calculate the combined tax cost for Liu and Ms. Chou.

A) $42,000
B) $60,500
C) $74,000
D) $52,000