What is AmStore's maximum business interest expense deduction this year?

A$)800,000$

B$)863,000$

C$)1,050,000$

D$)1,000,000$

E$)1,020,000$

This year AmStore Inc reported $$2$ million of taxable income on $$25$ million of revenue. The revenue

included $$200,000$ of interest income.

In calculating the taxable income, AmStore deducted:

$$300,000$ of depreciation

$$100,000$ of interest expense

$$10,000$ of net operating loss carryovers

What is AmStore's maximum business interest expense deduction this year?

A$)800,000$

B$)863,000$

C$)1,050,000$

D$)1,000,000$

E$)1,020,000$