M Corporation reported 2019 book net income of $185,000. The following items were included in book income for 2018:

State A income tax expense $ 15,000

State B income tax expense $ 5,000

Federal income tax expense $49,000

Book depreciation expense $ 18,000

Municipal bond interest income $ 10,000

US government obligation interest income $ 12,000

Dividends received from 5% owned US co. $ 8,000

Separately, M Corporation computed federal tax depreciation of $26,000.

A) Based on the above, compute Ms 2019 federal taxable income.

B) M Corporation computed state tax depreciation of $23,000. M is only taxable in States A and B. All investment income, including interest and dividend income is earned in State A. State A allows exclusion for interest earned on federal obligations, taxes all municipal interest and disallows all deductions for state income taxes .State A has not adopted federal depreciation methods and does not recognize the dividends received deduction. State A apportions taxable income based on the average of three factors- payroll, property, and sales. M Corporation has 60% of its payroll, 40% of its property, and 20 % of its sales in State A. Based on the above information; compute Ms state 2018 taxable income in State A.

C) M Corporation is looking to expand online sales activities into various states. What advice would you give M Corporation before they begin this expansion?