Shannon Is 16 Years Old and Is a Qualified Dependent

question 87

Multiple Choice

Shannon is 16 years old and is a qualified dependent of her mother. Shannon earns $1,500 as a counselor at a church summer camp and receives $2,500 of interest on a savings account established by her grandparents. Shannon's 2016 taxable income is:

• A)$- 0 -
• B)$1,500
• C)$2,150
• D)$2,500
• E)$2,950

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Definitions:

Transferors Own 80%

A situation in a business transaction where the original owners or transferors retain an 80% ownership interest in the property or entity after the transaction is completed.

Tax-Free

Earnings, income, or transactions that are not subject to tax by the government.

Incorporation

The process of legally constituting a company or corporation, offering protection to owners from personal liability for the company's debts and obligations.

Capital Loss Carryforward

A provision allowing taxpayers to use a net capital loss in one year to offset a net capital gain in future years, subject to limitations.