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The kiddie tax applies to the unearned income of dependent children.
A. True
B. False

User Sic
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1 Answer

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Final answer:

The assertion regarding the kiddie tax on dependent children's unearned income is accurate; it is designed to tax such income at the parents' rate beyond a specific threshold.

Step-by-step explanation:

The statement that the kiddie tax applies to the unearned income of dependent children is True. The kiddie tax is a tax rule in the United States that taxes a child's unearned income, such as interest, dividends, and capital gains, at their parents' tax rate if it exceeds a certain threshold. This is meant to prevent parents from shifting large amounts of investment income to their children to take advantage of their lower tax rate.

User Naby
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