Federal Tax Research 10th Edition by Steven Gill, Gerald Whittenburg, Roby Sawyers, Debra Sanders, William Raabe

Exercise 54

Karla is a single parent with two children, ages 7 and 11. She is a full-time student and earns $12,000. Both children receive dividends and capital gains from mutual funds acquired for them by their grandparents. Karla has elected to include her children's income on her return for the kiddie-tax computation. Since it is on her tax return, does her children's income affect the computation of Karla's earned-income credit