Anna has a 7-year-old child who does not earn any income. Anna earns a lot of money from her job. She asks you, her tax preparer, to assign or place a portion of her salary onto her childs tax return to avoid all her salary income from being placed on her own tax return. She wants this done so that a part of her salary would be taxed at her childs much lower tax rate. Of the following choices, which one contains the correct answer for you to give to Anna?

Anna does not have to report on her tax return the portion of the monies that she assigns to her child because she is allowed by law to make such assignments to a minor child.

Anna can assign a portion of her salary to her child but not any of her interest and dividend income, should she have any.

Anna is not allowed to make this assignment as a means of her avoiding paying taxes on any of her salary income.

Anna can assign her salary to her child. However, her child would then be taxed at the same tax rate as Anna because her child would be subject to the kiddie tax.