All the following statements concerning the “kiddie-tax” rules are correct EXCEPT:
(A) The rules are promulgated to curtail the shifting of income from high-tax-bracket parents to the lower-tax-bracket children.
(B) The rules are limited to trust income received by a child from trusts established by the child’s parents or grandparents.
(C) A standard deduction applies to a portion of the child’s unearned income.
(D) The rules provide for the taxation of a child’s net unearned income at the parent’s highest marginal tax rate.
Provide a detailed explanation for your answer. Only answer if you have a strong estate planning background.