Assume Alan's parents make gifts of $10,000 to him every year starting at age one, and that Alan's parents are in the 35 percent income tax bracket, and that Alan is now 15 years old and has $11,700 of interest income for 2014.

a. Calculate the tax on Alan's interest income.
b. Explain why the "kiddie tax" rules are in the law.

Question

Assume Alan's parents make gifts of $10,000 to him every year starting at age one, and that Alan's parents are in the 35 percent income tax bracket, and that Alan is now 15 years old and has $11,700 of interest income for 2014.
​
a. Calculate the tax on Alan's interest income.
b. Explain why the "kiddie tax" rules are in the law.

Quizplus · Accepted Answer

The Answer of Assume Alan's parents make gifts of $10,000 to him every year starting at age one, and that Alan's parents are in the 35 percent income tax bracket, and that Alan is now 15 years old and has $11,700 of interest income for 2014.
​
a. Calculate the tax on Alan's interest income.
b. Explain why the "kiddie tax" rules are in the law.

Assume Alan's Parents Make Gifts of $10,000 to Him Every