Which of the Following Is Not Immune from State Income

question 58

Multiple Choice

Which of the following is not immune from state income taxation, even if P.L. 86-272 is in effect?

• A) Sale of office equipment that is used in the taxpayer's business.
• B) Sale of office equipment that constitutes inventory to the purchaser.
• C) Sale of a warehouse used in the taxpayer's business.
• D) All of the above are protected by P.L. 86-272 immunity provisions.

---

Definitions:

Gross Method

Accounting treatment for purchase discounts where discounts are not considered until actually taken.

Note Payable

A promissory note from the maker’s point of view.

Interest Accrued

The accumulation of interest on a loan or bond that has been earned but not yet paid.

Periodic Inventory Method

An inventory accounting method where physical counts are used to determine the cost of goods sold and ending inventory at specific intervals.