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1 . Ramirez Corporation is subject to tax only in State A. Ramirez generated the following income and deductions. Federal taxable income $500,000 State A

1. Ramirez Corporation is subject to tax only in State A. Ramirez generated the following income and deductions.

Federal taxable income

$500,000

State A income tax expense deducted on the Federal return

45,000

Depreciation allowed for Federal tax purposes

300,000

Depreciation allowed for state tax purposes

250,000

Federal taxable income is the starting point in computing State A taxable income. Ramirezs A taxable income is:

a.

$495,000.

b.

$500,000.

c.

$545,000.

d.

$595,000.

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