Question

In 2019, Sheryl is claimed as a dependent on her parents' tax return. Sheryl did not provide more than half her own support.

What is Sheryl's tax liability for the year in each of the following alternative circumstances?

b. She received $7,200 of interest income from corporate bonds she received several years ago. This is her only source of income. She is 16 years old at year-end.

c. She received $7,200 of interest income from corporate bonds she received several years ago. This is her only source of income. She is 20 years old at year-end and is a full-time student.

d. She received $7,200 of qualified dividend income. This is her only source of income. She is 16 years old at year-end. (Round your final answer to 2 decimal places.)

Answer 1

Sheryl's Tax liability :

Kiddie Taxable Unearned Income	Tax Rate	case b - $7,200 - 16 years	case d - $7,200 - 16 years
Total unearned income ( income from dividends, interest etc.,)		7,200.00	7,200.00
First $2,200 , thresh hold amount	0%	-	-
up to $2,600	10%	260.00	260.00
$2,601 to $9,300	24%	576.00	576.00
$9,301 to $12,750	35%	-	-
all over $12,750	37%	-	-
Tax amount		836.00	836.00

for case c - Sheryl is not a kid, will be taxed at the normal rate of Tax @ 10% up to $9,700 so the tax will be $7,200*10%=$720