year old child with $5,600 worth of investment income. child's 2021 tax return? Pay tax at the same rate as for estates and trusts Pay tax at her parent's marginal tax rate Use the standard deduction to wipe out any tax on the 600

year old child with $5,600 worth of investment income. child's 2021 tax return? Pay tax at the same rate as for estates and trusts Pay tax at her parent's marginal tax rate Use the standard deduction to wipe out any tax on the 600

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter1: Federal Income Taxation—an Overview

Section: Chapter Questions

Problem 43P

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

1.
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Your client is a 10 year old child with $5,600 worth of investment income. Which of the following is an option for this
child's 2021 tax return?
Pay tax at the same rate as for estates and trusts
Pay tax at her parent's marginal tax rate
Use the standard deduction to wipe out any tax on the $5,600
Either B or C

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