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Interest, dividends, constructive receipt and the kiddie tax

SEE 1 Chapter 6 · IRS outline 2A2, 2A3, 2A9, 2A10, 1A16

Investment income looks simple on a 1099, but the SEE asks the questions behind the form. Is this interest taxable? Is that dividend qualified? When did the money count as received? Is the company paying the owner's bills really a dividend? And how much of a teenager's brokerage income is taxed at the parents' rate? Nadia works through the Okafors' investment folder with Theo.

In this chapter

1. Interest income: taxable, exempt and in between
2. Dividends: ordinary, qualified and the rest
3. Constructive receipt: when cash-method income counts
4. Constructive dividends: corporate money for personal use
5. The kiddie tax

This chapter has 5 lessons and 60 practice MCQs with explanations, plus flashcards and a recall sheet.

What this chapter covers

• Taxable and tax-exempt interest
• OID
• savings bonds
• ordinary, qualified and capital gain dividends
• return of capital
• constructive receipt and constructive dividends
• Forms 8615 and 8814

Chapter 5: Wages, fringe benefits, worker status, clergy and military · Chapter 7: Other income: gambling, cancelled debt, recoveries and 1099 reporting