Question Seth and Sara Moore are married taxpayers with a 35% marginal income tax rate. During the current year, they earned $10,000 interest on a bond investment. Seth and Sara have five minor children. Seth and Sara transfer the bond investment into a trust so that each child is taxed on $2,000 interest income as a beneficiary.

1. What was the yearly tax on the interest prior to the transfer?

2. Assuming a $1,000 standard deduction for each child, what is each child's taxable income?

3. How much tax is paid by each child?

4. What is the projected savings for the family of moving this money to the trust?

Express all answers within whole dollars, with commas as applicable and no dollar signs.