Under the Current Law 2015, There Is "Kiddie Tax" for Children

question 26

Multiple Choice

Under the current law 2015, there is "kiddie tax" for children. Which of the following statements isare true with respect to this controversial tax?

• A) It only applies to children under the age of 15
• B) It only applies to children who have net investment income greater than $2,100
• C) It is only levied on a child's earned income
• D) It could subject the child to pay taxes at the parent's highest marginal tax rate
• E) B and D

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Definitions:

Inheritance

A mechanism in object-oriented programming that allows a class to inherit properties and behavior (methods) from another class.

Derived Class

A class that inherits properties and methods from another class, also known as a child or subclass.

Base Class

A class from which other classes are derived or inherit properties and methods in object-oriented programming.

Constructor Invocation

The process of creating an instance of a class by calling its constructor, which initializes the new object.