Assume Alan's parents make gifts of $10,000 to him every year starting at age one, Alan's parents are in the 35 percent income tax bracket, and Alan is now 15 years old and has $11,700 of interest income for 2018.
a.Calculate the tax on Alan's interest income if his income is not included on his parents' return.
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, Alan's parents are in the 35 percent income tax bracket, and Alan is now 15 years old and has $11,700 of interest income for 2018.​
a.Calculate the tax on Alan's interest income if his income is not included on his parents' return.
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, Alan's parents are in the 35 percent income tax bracket, and Alan is now 15 years old and has $11,700 of interest income for 2018.​
a.Calculate the tax on Alan's interest income if his income is not included on his parents' return.
b.Explain why the "kiddie tax" rules are in the law.

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