Say a child has a billion dollars but his parents are in the million dollar tax bracket, is the custodian of?

Question

the account pay in the tax bracket of the billions or in their own tax brakcet.

this is if the child is not empancipated from the parents

Answer 1

Assuming US Federal income taxes are the subject of your question, the highest tax rate applies to incomes over $349,700. That means it doesn't matter if you use the parent's or the child's rate in your example. They are both the same.

Answer 2

The child is a minor. So any money earned from the billion (and a billion would kick off about $50,000,000 a year in interest in the worst possible case) would be declarable by the parents, who would owe $750,000 in taxes every year on it, even at the most favorable possible tax rate.

Answer 3

Tech., the child is charged separately from the parents,although the parents will be responsible for making the tax payments it will come from the child's Billion. The parents are required to keep their funds separte from the child's.

Answer 4

strange question. if you are the one with the billions dint worry about you can afford the tax. the millionaire parents can too.