Which is incidental property income for corporation

Reference no: EM132788404

Problem 1: Which of the following situations is incidental property income for a corporation?

A. A corporation has built up its cash reserves over several years, and its staff invests this surplus cash in a variety of publicly traded corporations, earning dividend income. This income is approximately 10 percent of corporate income on an annual basis.

B. A branch of a corporation invests surplus cash for 2-3 months every year earning interest income which is less than 1 percent of corporate income.

C. A corporation has a rental property which is leased to a retail outlet. The net rental income from this property is 5 percent of corporate income.

D. A corporation sells a building resulting in a capital gain which is about 10 percent of corporate income.

Reference no: EM132788404

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