Taxable Income

	Tax on Base of Bracket	Percentage on Excess above Base
Up to $50,000	$0	15%
$50,000-$75,000	7,500	25
$75,000-$100,000	13,750	34
$100,000-$335,000	22,250	39
$335,000-$10,000,000	113,900	34
$10,000,000-$15,000,000	3,400,000	35
$15,000,000-$18,333,333	5,150,000	38
Over $18,333,333	6,416,667	35

Company Z has $40,000 of taxable income from its operations, $5,000 of interest income, and $30,000 of dividend income from preferred stock it holds in other corporations. What is Company Zs tax liability? Assume a 70% dividend exclusion for tax on dividends.

	a.	$10,030
	b.	$8,840
	c.	$8,500
	d.	$7,055
	e.	$6,460