In which of the following circumstances will income of the child be taxed at the marginal tax rate of the child's parent?
I.Martin,age 6,earns $14,000 this year by acting in television commercials.
II.Allen,age 22 and a full time college student,has $4,000 of interest income on municipal bonds that he inherited from his grandfather last year.

Question

In which of the following circumstances will income of the child be taxed at the marginal tax rate of the child's parent?
I.Martin,age 6,earns $14,000 this year by acting in television commercials.
II.Allen,age 22 and a full time college student,has $4,000 of interest income on municipal bonds that he inherited from his grandfather last year.
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Quizplus · Accepted Answer

The "kiddie tax" applies to unearned income of children under 19 or full-time students under 24, taxing it at the parent's rate. Martin's earned income is not subject to kiddie tax, and Allen's municipal bond interest is tax-exempt.

In Which of the Following Circumstances Will Income of the Child