Which, If Any, of the Following Is a Correct Statement

question 169

Multiple Choice

Which, if any, of the following is a correct statement relating to the kiddie tax?

• A)If the parents are divorced, the income of the noncustodial parent is used to determine the allocable parental tax.
• B)The components for the application of the kiddie tax are not subject to adjustment for inflation.
• C)If the kiddie tax applies, the parents must include the income of the child on their own income tax return.
• D)The kiddie tax does not apply if both parents of the child are deceased.
• E)None of these.

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Definitions:

Yield To Maturity

The total return anticipated on a bond if it is held until the end of its lifetime.

Current Yield

Current yield is a financial term used to describe the annual income (interest or dividends) earned from an investment, expressed as a percentage of the current price of the security.

Coupon Rate

The yearly interest yield from a bond, shown as a percentage of its nominal value.

Yield To Maturity

The total return anticipated on a bond if it is held until the end of its lifetime, factoring in its current market price, face value, interest rate, and time to maturity.