Congress Closes 'Kiddie Tax' Loophole

Mark Luscombe, principal tax analyst at CCH, says there are a few exceptions: "These kiddie tax rules do not apply to a child who is married and files a joint return. And a new rule says the kiddie tax does not apply if the child's own earned income provides more than one-half of their support."

But Luscombe goes on to point out: "This has really frustrated efforts to transfer assets to children to fund college tuition expenses. But it is still useful for parents who want to transfer assets that their children can hold until the first year after graduation -- before they are earning a big salary. Then the grad can sell at his own lower tax rate -- and use the proceeds to pay off student loans!"

As long as there is a Congress, there will be new tax rules. And there will be accountants to figure out a way around them. Surely, we could put all this expensive talent to better use! The flat tax or national sales tax look more appealing every day. And that's The Savage Truth.