Problem: How can Emily maximize tax savings by transferring her substantial salary to her three children, ages ranging from 2 - 12? Emily has a 37% marginal tax rate.
- Transfer $2,200 of salary to each child.
- None of the other answers are correct.
- Transfer one -third of her salary to each child.
- Transfer $12,400 of salary to each child in order to take advantage of the standard deduction.