Use Figure 24.1 to provide the required information for Warbler Corporation, whose Federal taxable income totals $10 million.

Warbler apportions 70% of its business income to State C. Warbler generates $4 million of nonbusiness income each year, and 30% of that income is allocated to C. Applying the state income tax modifications, Warbler’s total business income this year is $12 million.

a. How much of Warbler’s business income does State C tax?
b. How much of Warbler’s nonbusiness income does State C tax?
c. Explain your results.

Figure 24.1: