The following information pertains to Lumis Corporation's operations for the year:

• Operating income$500,000
• Capital gain100,000
• Capital loss(250,000)
• Dividend income (< 20% owned)50,000
• Tax-free municipal bond interest income50,000

In addition to the above, Lumis had made charitable contributions in the preceding year that could not be deducted due to the 10% of TI limit in the amount of $15,000, which were carried over to the current taxable year for deduction, if allowed.

1)How much taxable income does Lumis report on its form 1120, Corporate Income Tax Return?

2)What is Lumis' current earnings & profits for the current year?

3)Assume that Lumis' taxable income is $600,000 (not the correct answer for the first part above).What is Lumis Corporation's income tax liability?

A.$450,000

B.$0

C.$535,000

D.$192,250

E.$550,000

F.$500,000

G.$350,000

H.None of the answers is correct

I.$204,000