Jade Corporation, a C corporation, had $100,000 operating income and $40,000 operating expenses during the year. In addition, Jade had a $2,000 long-term capital gain and a $10,000 short-term capital loss. Compute Jade's taxable income for the year.
A)$52,000.
B)$57,000.
C)$60,000.
D)$62,000.
E)None of the above.

Question

Quizplus · Accepted Answer

Jade Corporation's taxable income is calculated as follows: Operating income of $100,000 minus operating expenses of $40,000 equals $60,000. The net capital loss of $8,000 ($2,000 long-term gain minus $10,000 short-term loss) cannot be deducted from ordinary income for a C corporation, so it does not affect the taxable income. Therefore, the taxable income is $60,000.

Jade Corporation, a C Corporation, Had $100,000 Operating Income and $40,000