Parents Often Wish to Shift Income to Young Children in Order

question 28

Multiple Choice

Parents often wish to shift income to young children in order to lower the family tax burden.Tax policies and provisions that limit that practice include all of the following except

• A)the claim of right doctrine.
• B)the kiddie tax.
• C)the assignment of income doctrine.
• D)the imposition of the gift tax.

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Definitions:

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its share price.

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividends paid to shareholders, indicating the company’s financial health and profitability.

Required Rate of Return

The required rate of return is the minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.

Put Option

A financial contract giving the buyer the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.