James,an executive,receives a $600,000 payment under a golden parachute agreement.James's base amount from Silver,Inc. ,is $140,000.What is the total tax James must pay,assuming a 39.6% individual tax rate?
A)$0
B)$92,000
C)$210,000
D)$329,600
E)None of these

Question

Quizplus · Accepted Answer

$329,600.James would have a regular income tax liability of $237,600 ($600,000 × .396)plus a nondeductible excise tax of $92,000 ($460,000 × .20).

James,an Executive,receives a $600,000 Payment Under a Golden Parachute Agreement