During 2013,Jasmine (age 12) received $2,400 from a corporate bond.She also received $600 from a savings account established for her by her parents.Jasmine lives with her parents and she is their dependent.Assuming her parents' marginal tax rate is 28%,what is Jasmine's gross tax liability?

Question

Quizplus · Accepted Answer

Jasmine's unearned income is $3,000 ($2,400 from the bond + $600 from the savings account). The first $1,000 is tax-free, the next $1,000 is taxed at her rate (10%), and the remaining $1,000 is taxed at her parents' rate (28%). So, her tax liability is $0 + $100 + $280 = $380.

During 2013,Jasmine (Age 12) Received $2,400 from a Corporate Bond