For the year ended December 31, 2013, Prunus, Inc., reported net income before federal income tax expense of $900,000 per the corporation’s books. This figure included the following items:
Interest income on tax-exempt municipal securities $30,000
Loss on sale of land acquired in 1985 as an investment $40,000
Interest expense on loan to purchase tax-exempt municipal securities $16,000
What is the taxable income of Prunus, Inc. for 2013?
a. $886,000
b. $900,000
c. $918,000
d. $926,000
e. None of the above