Which, if any, of the following is a correct statement relating to the kiddie tax in 2018?
A) If the parents are divorced, the income of the noncustodial parent is used to determine the allocable parental tax.
B) The components for the application of the kiddie tax are not subject to adjustment for inflation.
C) If the kiddie tax applies, the parents must include the income of the child on their own income tax return.
D) The kiddie tax does not apply if both parents of the child are deceased.
E) None of these.

Question

Quizplus · Accepted Answer

The kiddie tax does not apply if both parents of the child are deceased, as the tax is intended to prevent parents from shifting income to their children to take advantage of lower tax rates.

Which, If Any, of the Following Is a Correct Statement