Question: Week 3: Tax Reduction and Management Techniques—Charitable Gifts, Estates & Trusts, Kiddie Tax, and AMT

Week 3: Tax Reduction and Management Techniques—Charitable Gifts, Estates & Trusts, Kiddie Tax, and AMT

1.     Carols’ UTMA has a current balance of $103,184. Assume that, in 2022, Carol’s UTMA produces a 2% dividend yield that is 100% qualified dividend income. This is the only income that Carol has for the year. What is the amount of Carol’s income tax liability for the year?

2.     Assume the same dividend information as in question 1. For purposes of this question, assume there was a sale of part of the mutual fund in the account that generated a $3,000 long-term capital gain. What is the amount of Carol’s income tax liability for the year?

3.     We know that John wants to donate to his alma mater, State College. State College is a 50% organization. John and Susan have discussed a sizable contribution this year. They’ve discussed donating all of their ExxonMobil stock to State College. The current FMV is $126,000. What would the tax consequences be if they made the contribution this year?