Question

Required information

[The following information applies to the questions displayed below.]

In 2018, Sheryl is claimed as a dependent on her parents' tax return. Sheryl did not provide more than half her own support.

What is Sheryl's tax liability for the year in each of the following alternative circumstances? Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates, Estates and Trusts for reference. (Leave no answer blank. Enter zero if applicable.)

c. She received $7,100 of interest income from corporate bonds she received several years ago. This is her only source of income. She is 20 years old at year-end and is a full-time student.

Answer 1

Given: sheryl is dependent on her parents.

Scenario1: Assuming she provide half of her own contribution, contribution should me made from money earned on her own skills and talent and not parents money.

In such case 50℅ income to be taxed in income tax return of sheryl under income from other sources and other 50% of $7100 that is 3550 to be taxed under income from other sources in tax returns of either of parent whose income is greater than other.

Scenerio 2: assuming whole contribution is done by parent that total interest earned $7100 to be taxed/clubbed under head income from other sources in tax returns of parent whose income is greater than other.

​​​​