A corporation expects to have $500,000 in gross income, but wants to lower its tax bill. To do this, they donate a painting that the corporation has owned for the last 6 months to an art museum, so that the corporation may deduct a charitable contribution.

The museum intends to sell the painting to help fund the cost of the purchase of a different exhibit. The painting originally cost the corporation $10,000 and is now valued at $30,000. In addition, the corporation has $20,000 of trade or business deductions it intends to claim this year.

What is the corporation's taxable income?

YOUR

ANSWER

CORRECT

ANSWER

$440,000

$470,000

$480,000

$490,000