For the year ended December 31, 2007, Dodd Corp. had net income per books of $100,000. Included in the computation of net income were the following items:

Provision for federal income tax

$27,000

Net long-term capital loss

5,000

Keyman life insurance premiums (corporation is beneficiary)

3,000

Dodd’s 2007 taxable income was

  1. $127,000
  2. $130,000
  3. $132,000
  4. $135,000