Under the current law 2015, there is "kiddie tax" for children. Which of the following statements isare true with respect to this controversial tax?

Question

Quizplus · Accepted Answer

Choice B is correct because the kiddie tax only applies to children who have net investment income greater than $2,100. 
Choice D is also correct because under the kiddie tax, a child's unearned income (such as investment income) may be taxed at the parent's highest marginal tax rate if that rate is higher than the child's own tax rate. Therefore, the correct answer is E.

Choices A and C are incorrect because the kiddie tax applies to children under the age of 18 (or under the age of 24 if the child is a full-time student) and it only applies to a child's unearned income, not earned income.

Under the Current Law 2015, There Is "Kiddie Tax" for Children