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Natalie is $8$ years old and has been gifted shares of stock in an airline. In $2024,$ the airline issued a qualified dividend. Natalie has no other sources of income and her parents file Married Filing Jointly with their taxable income presented below.

Required:

$1.$ Complete the Kiddie Tax computation.

$2.$ Complete the Income Tax computation for Natalie.

$3.$ Determine the total tax on the dividends.

Note: Reference the below data and abbreviated Tax Rates for Qualified Dividends chart in your formulas.

Number of Shares: $80$ Tax Rates for Qualified Dividends

Dividends per Share: $$65\mathrm{.}50$ Married Filing Jointly Single

Natalie's Earned Income: $$0\mathrm{.}00$ Bottom Top Bottom Top

Natalie's Parents' Taxable Income: $$582,0000\%$ $$0$ $$94,050$ $$0$ $$47,025$

$15\%$ $$94,050$ $$583,750$ $$44,626$ $$518,900$

Kiddie Tax Computation $20\%$ $$583,751$ $$518,901$

Gross income $/$ AGI $$5,240$

The Greater of:

Minimum standard deduction $$1,300$

$$400$ plus earned income $$400$

Standard deduction for a dependent $$1,700$

Taxable income $$3,540$

Gross unearned income less $$2,500$ $$2,740$

Net unearned income $$2,740$

Kiddie tax $$411\mathrm{.}00$

Gross income $/$ AGI $$5,240$

The Greater of:

Minimum standard deduction $$1,300$

$$400$ plus earned income $$400$

Standard deduction for a dependent $$1,700$

Taxable income $$3,540$

Gross unearned income less $$2,500$ $$2,740$

Net unearned income $$2,740$

Income subject to tax at Natalie's rate $$800$

Natalie's income tax $$0$

Total tax $$411\mathrm{.}00$

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