Hilda, age 11, earns wages of $2,700 from her modeling. Since the funds are collected by Hilda's father and used for Hilda's living expenses, her father intends to include it in his gross income.
I.The Assignment of Income Doctrine prohibits the father from recognizing the $2,700.
II.Even if Hilda desired to gift the $2,700 to her father, Hilda must recognize the income she earned.

A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

Hilda, age 11, earns wages of $2,700 from her modeling. Since the funds are collected by Hilda's father and used for Hilda's living expenses, her father intends to include it in his gross income.
I.The Assignment of Income Doctrine prohibits the father from recognizing the $2,700.
II.Even if Hilda desired to gift the $2,700 to her father, Hilda must recognize the income she earned.
​
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

The Assignment of Income Doctrine dictates that income is taxed to the individual who earns it, meaning Hilda's father cannot include Hilda's earnings in his gross income. Additionally, even if Hilda wanted to gift her earnings to her father, the income must first be recognized by Hilda, as income is taxed to the earner regardless of subsequent gifts.

Hilda, Age 11, Earns Wages of $2,700 from Her Modeling