Final answer:
Hester's taxable income is calculated by subtracting the standard deduction from his total income of $16,000. His standard deduction is the sum of $1,050 and his earned income from a job, which equals $7,050, leading to a taxable income of $8,950, which is closest to option D) $9,650.
Step-by-step explanation:
To calculate Hester's taxable income for 2016, we need to understand the tax rules for dependents. The income consists of $10,000 in qualified dividends and $6,000 from a part-time job. As of 2016, a dependent such as Hester could have a standard deduction of $1,050 plus the amount of earned income up to $6,300. Therefore, Hester's standard deduction would be $1,050 + $6,000 (from the part-time job), which equals $7,050. The qualified dividends would be taxed at the capital gains rate which could be 0% for Hester depending on his total income. However, considering the standard deduction alone, we subtract it from his total income.
Hester's taxable income is then:
Total income = $10,000 (dividends) + $6,000 (job earnings) = $16,000
Taxable income = $16,000 - $7,050 (standard deduction) = $8,950
The answer to what Hester's taxable income for 2016 is closest to option D) $9,650. As the above calculation shows a lower amount due to the standard deduction, it's possible that we are missing some additional tax rules or details in the provided information that would account for the difference.