Hopkins Co. at the end of 2014, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $1,500,000 Estimated litigation expense 2,000,000 Extra depreciation for taxes (3,000,000) Taxable income $ 500,000

The estimated litigation expense of $2,000,000 will be deductible in 2015 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $1,000,000 in each of the next three years. Thus one temporary difference generates a deferred tax asset and the other temporary difference generates a deferred tax liability. The income tax rate is 30% for all years.

Income tax expense is

Select one:

a. $0.

b. $300,000.

c. $150,000.

d. $450,000.