Yusef, age 15, is a dependent of his parents. In 2018 he earned $5,000 from a part- time job and $8,000 of interest income on bonds given him by his grandparents, resulting in taxable income of $7,650. Under kiddie tax rules, calculation of tax requires dividing taxable income between net unearned income and earned taxable income. Yusef's taxable income will be divided as follows:

Question

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Yusef's net unearned income is calculated by subtracting the standard deduction for unearned income ($2,100 in 2018) from his total unearned income ($8,000). This results in $5,900 of net unearned income. The remaining $1,750 of his taxable income is considered earned taxable income.

Yusef, Age 15, Is a Dependent of His Parents