Chapter 6, Problem 8P

a

To determine

Introduction: Tax law allows parents to give income-earning assets such as bonds, mutual funds, and bank certificates, etc. to their minor children since children are generally in lower income tax bracket that is earnings on these assets have lower tax than the parent would incur.

The taxable income of S for the purposes of the tax on child’s unearned income.

b

To determine

Introduction:Tax law allows parents to give income-earning assets such as bonds, mutual funds, and bank certificates, etc. to their minor children since children are generally in lower income tax bracket that is earnings on these assets have lower tax than the parent would incur.

The net unearned income of S.

c

To determine

Introduction:Tax law allows parents to give income-earning assets such as bonds, mutual funds, and bank certificates, etc. to their minor children since children are generally in lower income tax bracket that is earnings on these assets have lower tax than the parent would incur.

The earned taxable income of S.

d

To determine

Introduction:Tax law allows parents to give income-earning assets such as bonds, mutual funds, and bank certificates, etc. to their minor children since children are generally in lower income tax bracket that is earnings on these assets have lower tax than the parent would incur.

The tax liability for 2019.