Ellie, Age 12, Earns Wages of $4,300 from Her Modeling

question 65

Multiple Choice

Ellie, age 12, earns wages of $4,300 from her modeling. Since the fees are collected by Ellie's father and used for Ellie's living expenses, her father intends to include it in his gross income.
I.Ellie received no cash so does not have to report any income.
II.The Assignment of Income Doctrine prohibits the father from recognizing the $4,300.
III.Even if Ellie desired to gift the $4,300 to her father, Ellie must recognize the income she earned.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Only statement III is correct.
• D)Only statements II and III are correct.
• E)Statements I, II, and III are correct.

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Definitions:

Not Proprietary

Refers to something that is not owned or controlled by a specific entity and is open for use by anyone.

Economic Growth

An increase in the production of goods and services in an economy over a period, typically reflected as a percentage increase in real GDP.

Doubling Inputs

When the quantities of all inputs used in the production process are increased by the same proportion.

Foreign Direct Investment

is an investment made by a firm or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets.