Marisa is 16 years old and a dependent of her parents. She earned $5,000 of income from wages working at Crave Ice Cream Shop and has $3,000 of interest income from corporate bonds. Which of the following statements are true?She is not subject to kiddie tax because she has earned income.She is subject to kiddie tax on both her earned and unearned income.Her unearned income over $2,200 is taxed at her parents’ tax rates.Her earned income over $2,200 is taxed at her parents' tax rates.Her earned income is taxed at her rates.All $3,000 of her investment income is subject to tax at her parents’ tax rates.Group of answer choices I only None of these optionsII onlyIII and IVV onlyIII and V

Kid’s tax: The tax cuts and jobs act made some significant changes in the way a child’s income is…

Answered: Marisa is 16 years old and a dependent…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Marisa is 16 years old and a dependent of her parents. She earned $5,000 of income from wages working at Crave Ice Cream Shop and has $3,000 of interest income from corporate bonds. Which of the following statements are true?

1. She is not subject to kiddie tax because she has earned income.
2. She is subject to kiddie tax on both her earned and unearned income.
3. Her unearned income over $2,200 is taxed at her parents’ tax rates.
4. Her earned income over $2,200 is taxed at her parents' tax rates.
5. Her earned income is taxed at her rates.
6. All $3,000 of her investment income is subject to tax at her parents’ tax rates.

Group of answer choices

I only

None of these options

II only

III and IV

V only

III and V

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