In order to shift the taxation of dividend income from a parent to a child
A)the parent must direct the corporation to pay the dividend to the child.
B)the parent must transfer ownership of the stock to the child.
C)the parent can deposit the dividend in the child's bank account.
D)all of the above will result in shifting the taxation to the child.

Question

Quizplus · Accepted Answer

Transferring ownership of the stock to the child is the only option that will result in shifting the taxation of dividend income from the parent to the child. directing the corporation to pay the dividend to the child or depositing the dividend in the child's bank account will still result in the dividend income being taxed at the parent's tax rate.

In Order to Shift the Taxation of Dividend Income from a Parent