Kristi Corporation, a calendar-year, accrual-basis corporation had net income per the books of $850,000 for the

current year. Included in this number were the following items:

Federal income taxes $200,000

Interest income on U.S. treasury bonds 26,000

Interest income on municipal bonds 22,000

Charitable contribution in excess of 10% limitation 4,000

Tax penalty assessed by IRS 1,000

Capital loss on sale of land (no other capital asset sales) 3,000

Business entertainment expense 20,000

MACRS depreciation in excess of book depreciation is $5,000.

Calculate Kristi Corporation's taxable income before special deductions for the current year.