Question

.           Sylvia, age 17, is claimed by her parents as a dependent for 2019. During 2019, she had wages from a part-time job of $2,000, capital gains income of $4,200, and no other income or deductions (except the standard deduction). Sylvia’s taxable income is:

a.         $6,200 – $2,350 = $3,850

b.         $6,200 – $4,400 = $1,800.

c.         $6,200 – $4,550 = $1,650.

d.         $6,200 – $350 = $5,850.

e.         $6,200 – $1,050 = $5,150.

Answer 1

To arrive at the answer we shall first calculate the amount of deduction allowed,

The provision stands as, higher of 1,100 or 350 plus earned income will be allowed as a deduction to a taxpayer who is claimed as a dependent by another person.

Therefore the amount of deduction will be higher of 1,100 or 350 + 4,200 which is 4,550.

So the answer is 6,200 - 4,550 = 1,650.