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Question
| Taxable Income | Tax Rate |
| Not over $50,000 | 15% |
| $50,001 - $75,000 | 25% |
| $75,001 - $100,000 | 34% |
| $100,001 - $335,000 | 39%* |
| $335,001 - $10,000,000 | 34% |
| $10,000,001 - $15,000,000 | 35% |
| $15,000,001 - $18,333,333 | 38%** |
| Over $18,333,333 | 35% |
*5% of this rate represents a phaseout of the benefits of the lower tax rates on the first $75,000 of taxable income.
**3% of this rate represents a phaseout of the benefit of the lower tax rate (34% rather than 35%) on the first $10 million of taxable income.
Using the rates above, determine the tax liability of Coastal Inc. in 2004 if the firm had the following stream of taxable income:
| Year | Taxable Income |
| 2000 | ($450,000) |
| 2001 | (80,000) |
| 2002 | 60,000 |
| 2003 | 145,000 |
| 2004 | 360,000 |
a. $83,450
b. $ 5,250
c. $95,200
d. none of the above
Answer
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