13

Chantell, an attorney, had the following income and expenses in her business:

Commissions income    $250,000

Expenses:

Referral fees paid to non-attorneys for referrals (illegal under state law and subject to criminal penalties) $30,000
Referral fees paid to other attorneys for referral (not illegal under state law):
$21,000
Travel and transportation $16,000
Supplies $5,000
Office and phone $4,000
Parking tickets  $1,500

How much net income must Chantell report from this business?

a.     $172,500.
b.    $174,000.
c.     $204,000.
d.    $225,000.
e.     $250,000.