Question

Required information Skip to question [The following information applies to the questions displayed below.] In 2019, 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.) rev: 02_29_2020_QC_CS-202942 c. She received $5,100 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.

Tax Liability:

d. She received $5,100 of qualified dividend income. This is her only source of income. She is 16 years old at year-end. (Round your final answer to 2 decimal places.)

Tax Liability:

Answer 1

Answer:-

d)

Particulars	Amount	Remarks
Gross Income	5100
Standard Deduction	1100
$350 plus earned income	350
Standard Deduction	1100	whichever greater 1100 or 350
Taxable Income	4000	(5100-1100)
Gross Unearned Income - $2200	2900	(5100-2200)
Net Unearned Income	2900	whichever less 4000 or 2900
Kiddie tax	37.5	[(2650 * 0%) + (2900 - 2650) * 15%] tax rate for preferentially taxed dividend
Taxable Income at Sheryl's Tax Rate	1100	(4000 -2900)
Sheryl's Tax Rate	0%	Sheryl's taxable income falls in 0% bracket her only preferential income is taxed
Tax	0
Total Tax	37.5	(37.5 + 0)