My dependent child has unearned income above $2600 and I will need to File a Form 8615 for their taxes.
Let's say their unearned income is all interest income of $5,000. For Line 4 of Form 8615, I'm asked to provide their taxable income from their Form 1040, Line 15. I assume that number considers their standard deduction of $1,350? So in this example, their taxable income from Form 1040, Line 15 would be $3,650 ($5,000-$1,350)?
It seems this extra $1,300 is tacked on at the end of Form 8615 (Line 14) and then taxed at the child's rate (10%). Am I understanding this correctly?
