Question

A 17 year old child has $1,000 of adjusted gross unearned income for 2017 and no earned income. The marginal tax rate of the child's parents is 28%. What is the child's tax liability?

A) $0 B) $85 C) $238 D) $950

Answer 1

A) $0

Step-by-step explanation:

Provided information

Adjusted gross unearned income = $1,000

Marginal tax rate = 28%

By considering the above information, we can find out the child's tax liability

In the 2017 year, the credit for per child is up to $1,000 so there is no tax levied in the year 2017 as it is within the prescribed limit

Hence, child tax liability would be zero.