Azul Corporation,a personal service corporation,had $300,000 of active income,$40,000 of portfolio income,and a $190,000 passive loss during the year.How much is Azul's taxable income?
A)$340,000.
B)$300,000.
C)$150,000.
D)$110,000.
E)None of the above.

Question

Quizplus · Accepted Answer

Azul Corporation's taxable income is calculated by adding active income and portfolio income, then subtracting passive losses. However, passive losses cannot offset active or portfolio income, so the taxable income is $300,000 (active income) + $40,000 (portfolio income) = $340,000.

Azul Corporation,a Personal Service Corporation,had $300,000 of Active Income,$40,000 of Portfolio