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Assume Tom's parents make gifts of $7,500 to him every year starting at age one, Tom's parents are in the 35 percent income tax bracket,
Assume Tom's parents make gifts of $7,500 to him every year starting at age one, Tom's parents are in the 35 percent income tax bracket, and Tom is now 14 years old and has $6,190 of interest income for current year. Instructions:
a. Calculate the tax on Tom's interest income.
b. Explain why the "kiddie tax" rules are in the law.
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