Austin Is the Sole Shareholder of Purple,Inc

Multiple Choice

Austin is the sole shareholder of Purple,Inc.Purple's accumulated E & P at the beginning of the year is $700,000.Purple's taxable income after paying a salary and bonus to Austin of $100,000 is $500,000.Assume the salary and bonus payment are reasonable.Purple's maximum exposure in calculating accumulated taxable income for purposes of the accumulated earnings tax for the current tax year is:

A) $330,000.
B) $500,000.
C) $600,000.
D) $1,300,000.
E) None of the above.