In which of the following circumstances will income of the child be taxed at the rates applicable to estates and trusts?
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 rates applicable to estates and trusts?
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

Income of a child is typically taxed at the child's tax rates or at the parents' tax rates under the "kiddie tax" rules, not at the rates applicable to estates and trusts. The kiddie tax applies to unearned income of certain children, but the specifics of the scenarios provided do not align with taxation at estate and trust rates.

In Which of the Following Circumstances Will Income of the Child