1. Thomas and Thelma are married with 4 dependent children, all under age 18. They had the

following investment income for 2018. Which of the children will have their investment income

taxed at the rate for trusts and estates?

Interest Dividends Capital Gains or (Losses)

Ann $540 $1,170 $200

Mary $710 $1,650 ($220)

Tom, Jr. $580 $1,510 ($600)

Eric $575 $1,100 $450

a) Tom, Jr.

b) Mary and Eric

c) Ann and Eric

d) Mary and Tom, Jr.

2. Regarding children with investment income, which tax rate will be applied to those who are

subject to the trusts and estates rate?

a) $10%

b) 24%

c) 35%

d) 37%

3. Sherry and John, both age 29, are married and had household income of $42,000 for 2018.

Neither had minimum essential health coverage at any time during the tax year and do not

qualify for any exemptions. They have no dependents. What is their maximum shared

responsibility payment?

a) $2,085

b) $ 450

c) $ 0

d) $1,390