In Certain Circumstances a Child with Very Little Income May

question 44

True/False

In certain circumstances a child with very little income may have their income taxed at the parents' marginal tax rate.

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Definitions:

Corporation

A legal entity that is separate from its owners, who share limited liability protection, and is recognized by law as having rights and responsibilities.

Profit

The right to go onto someone’s land and take part of the land or a product of it away from the land.

S Corporation

A special designation granted by the IRS to small businesses that allows them to pass corporate income, credits, and deductions through to shareholders, avoiding double taxation.

Taxed

Subjected to a financial charge or levy by a governmental organization in order to fund various public expenditures.