Question

Problem 8-52 (LO 8-1) [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.)

a. She received $5,500 from a part-time job. This was her only source of income. She is 16 years old at year-end.

b. She received $5,500 of interest income from corporate bonds she received several years ago. This is her only source of income. She is 16 years old at year-end.

c. She received $5,500 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.

d. She received $5,500 of qualified dividend income. This is her only source of income. She is 16 years old at year-end

( Could someone please help me to answer these questions. Please give me explanation too if possible. I looked at similar questions , but I could not figure it out.))

Answer 1

Solution:-

• Expecting question from USA , kiddies impose applies till multi year and if there should be an occurrence of understudy till 24 years.
• Child can take 1050 take come without government expense and wage past 2,100 is assessable @ parent rate.

answer for (a),(b),(c):-

tax rate = 10%

capital gain = 0%

Dividends tax = 15%

Total liabilities =  Total income * tax rate

Total income = salary + tax

Where ,

salary = $5,500

tax = $2,100

= 5,500 + 2,100

Total income = $3,400

Total liabilities = $3,400 * [10% + 15%]

= $850 (for students upto 24 years)

Total liabilities = $850

d. She received $5,500 of qualified dividend income. This is her only source of income. She is 16 years old at year-end:-

Dividend tax rate = 15%

Total liabilities =  Total income * tax rate

Total income = salary + tax

Where ,

salary = $5,500

tax = $2,100

= 5,500 + 2,100

  Total income = $3,400

Total liabilities = $3,400 * 15%

= $510

Total liabilities =$510