For each situation below, compute the child’s taxable income and the amounts that would be taxed at the child’s rates and the parents’ for the 2021 tax year.

a. When J’s rich uncle died, he left her GM corporate bonds. This year J received $3,050 of interest from these bonds, her only income. J is seven years old.

b. L, age 13, works in his father’s music store on weekends. During the year, he earned $1,200 from this job. In addition, L had $2,500 of interest income attributable to a gift from his grandfather.

c. Same as (b) except L’s earned income was $6,600 and interest income was $2,850.

find the child's taxable income, the amount taxed at the parents' rate, and the amount taxed at the child's rate for each situation.

Answer rating: 100% (QA)

a Year 2021 Earned income 0 Interest income Unearned 3050 AGI 305... View the full answer