Answer the following questions and MUST INCLUDE EXPLANATIONS.

1. Eduardo, age 11, is a dependent of his parents. His only source of income in 2020 is $7,500 of interest income on bonds given him by his grandparents, resulting in taxable income of $6,400. Under kiddie tax rules, calculation of tax requires dividing taxable income between net unearned income and other taxable income taxable at his own rate. Eduardo's taxable income will be divided as follows:

A) net unearned income -$6,400 and other taxable income -$0

B) net unearned income -$5,300 and other taxable income -$1,100

C) net unearned income -$0 and other taxable income -$6,400

D) net unearned income -$7,500 and other taxable income -$1,100

2. Husband and wife, who live in a common law state, are eligible to file a joint return for 2020, but elect to file separately. Wife has adjusted gross income of $30,000 and has $3,500 of expenditures which qualify as itemized deductions. Husband deducts itemized deductions of $15,750. What is the taxable income for the wife?

A) $17,600

B) $22,800

C) $26,500

D) None of the above

3. Leon, age 14, is a dependent of his parents. In 2020 he earned $6,500 from a part-time job and $7,500 of interest income on bonds given him by his grandparents, resulting in taxable income of $7,150. Under kiddie tax rules, calculation of tax requires dividing taxable income between net unearned income and other taxable income taxed at his own rate. Leon's taxable income will be divided as follows

A) net unearned income -$1,850 and earned taxable income -$5,300.

B) net unearned income -$7,150 and earned taxable income -$0.

C) net unearned income -$0 and earned taxable income -$7,150.

D) net unearned income -$5,300 and earned taxable income -$1,850.

4. Hosain is six years old, and the son of parents in the 37% tax bracket. His only source of taxable income comes from a corporate bond fund received as a gift from her grandparents last year. For 2020, Hosain earned $10,000 of interest income from this fund. What is Hosain's federal income tax liability?

A) $110

B) $790

C) $2,626

D) $2,996

5. Chan, who is 32 and single, has adjusted gross income of $70,000, itemized deductions of $10,000 and a lifetime learning credit of $1,000. In 2020, Chan will have taxable income of

A) $55,600.

B) $57,600.

C) $60,000.

D) $70,000.

6. Hansel and Gretel are married. Hansels salary is $75,000. His tax withholding is $9,500. Gretels salary is $70,000. Her tax withholding is $9,000. They have itemized deductions of $27,500. If they file Married Filing Joint for 2020, what is their tax refund or tax amount that is owed to the IRS?

1. Owe $1,967 in tax.
2. Owe $2,042 in tax
3. Have a refund of $1,070
4. Have a refund of $2,042.