Pyrrha, a 12-year-old dependent of Epimetheus and Pandora, received $8,200 of interest income in 2019. What is Pyrrha's gross tax liability for the year?

What will be an ideal response?


$1,186.

Answer computed as follows:


DescriptionAmountExplanation
(1)Gross income/AGI (all unearned income)$8,200 $8,200 interest All unearned income
(2)Standard deduction 1,100 Minimum for taxpayer claimed as a dependent on another return (no earned income, so must use minimum)
(3)Taxable income$7,100 (1) - (2)
(4)Gross unearned income minus $2,200 6,000 (1) - $2,200
(5)Net unearned income 6,000 Lesser of (3) or (4)
(6)Kiddie tax$1,076 [$260 + (((5) ? $2,600) × 24%)], trust and estate tax rate schedule
(7)Taxable income taxed at Pyrrha's rate 1,100 (3) - (5)
(8)Tax on taxable income using Pyrrha's tax rates$110 (7) × 10% (See single filing status, $1100 taxable income.)
 Pyrrha's total tax liability$1,186 (6) + (8)
 

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