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 the above.

Question

Quizplus · Accepted Answer

Operating income = $370,000
Operating expenses = $290,000
Net operating income = $80,000
Long-term capital gain = $10,000
Short-term capital loss = $17,000
Taxable income = Net operating income + Long-term capital gain - Short-term capital loss
Taxable income = $80,000 + $10,000 - $17,000
Taxable income = $73,000

Therefore, the answer is choice C ($80,000).

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