During 2020, Jasmine (age 12)received $7,250 from a corporate bond. She also received $750 from a savings account established for her by her parents. Jasmine lives with her parents and she is claimed as a dependent in their tax return.. What is Jasmine's gross tax liability? ( Use Tax Rate Schedule, Standard deduction, Estates and Trusts.)

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Quizplus · Accepted Answer

Jasmine's unearned income exceeds the threshold for the "kiddie tax." Her standard deduction is $1,100, so $6,900 ($7,250 + $750 - $1,100) is taxable. The first $1,100 is taxed at her rate (10%), and the rest is taxed at the parent's rate (24%). Thus, her gross tax liability is $1,138.

During 2020, Jasmine (Age 12)received $7,250 from a Corporate Bond