The Kiddie Tax Does Not Apply as to a Child

question 42

True/False

The kiddie tax does not apply as to a child whose earned income is more than one-half of his or her support.

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Definitions:

Ownership

The right to possess property, whether tangible or intangible, and exercise control over it.

Valuation Allowance

A reserve created against the deferred tax asset due to uncertainty concerning its realization.

Unrealized Gain

Profit that comes from an investment that has increased in value but has not yet been sold by the investor, thus not resulting in actual income.

Trading Investments

Assets purchased with the intention of reselling in the short term for profit, often including stocks and bonds.