Track Corporation, a calendar year, accrual basis taxpayer, provides the following information for the current year: Net income per books (after-tax) $258,050 Federal income tax liability 40,950 Interest income from tax-exempt bonds 5,000 Interest paid on loan incurred to purchase tax-exempt bonds 2,000 Life insurance proceeds received as a result of death of Herons president 100,000 Premiums paid on policy on life of Herons president 4,500 Excess of capital losses over capital gains 2,000 Retained earnings at beginning of year 375,000 Cash dividends paid 90,000 Tax depreciation in excess of book depreciation 7,500 What is taxable income?

$375,000

$195,000

$307,500

None of these answers

$135,000