Treatment of unearned income of minor children
(1) In general
(1)In general#
In the case of a child to whom section 1(g) applies, the exemption amount for purposes of section 55 shall not exceed the sum of—
(A) such child’s earned income (as defined in section 911(d)(2)) for the taxable year, plus
(B) $5,000.
(1)(A)#
such child’s earned income (as defined in section 911(d)(2)) for the taxable year, plus
(1)(B)#
$5,000.
(2)Inflation adjustment#
In the case of any taxable year beginning in a calendar year after 1998, the dollar amount in paragraph (1)(B) shall be increased by an amount equal to the product of—
(A) such dollar amount, and
(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “1997” for “2016” in subparagraph (A)(ii) thereof.
If any increase determined under the preceding sentence is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.
(2)(A)#
such dollar amount, and
(2)(B)#
the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “1997” for “2016” in subparagraph (A)(ii) thereof.
If any increase determined under the preceding sentence is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.