Trail Corporation Has Gross Profits on Sales of $140,000 and Deductible

question 33

Multiple Choice

Trail Corporation has gross profits on sales of $140,000 and deductible expenses of $180,000. In addition, Trail has a net capital gain of $60,000. Trail's taxable income is

• A)a $20,000 loss.
• B)a $40,000 loss.
• C)$60,000.
• D)$20,000.

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Definitions:

Progressive

Pertaining to a taxation system in which the tax rate increases as the taxable amount increases, imposing a higher percentage rate on the wealthy to ensure equity.

Consumption Tax

A tax on the purchase of goods or services, levied at the point of sale, designed to tax spending rather than income or savings.

Encourage Consumption

Measures or strategies aimed at increasing consumer spending and demand for goods and services.

Federal Income Tax

A tax levied by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.