Which of the following is true regarding the taxation of Sonja's unearned income?

The statement that the first $1,300 of Sonja's unearned income is tax-free is accurate because of the application of the "kiddie tax" provisions. Under these provisions, the first $1,300 of unearned income received by a dependent child is not subject to federal income tax due to the standard deduction for dependents. This amount can effectively be tax-free since it matches or falls within the standard deduction limit for such children.

Additionally, the next $1,300 of unearned income is generally taxed at the parent's marginal tax rate if it exceeds the first $1,300 threshold. Any unearned income above $2,600 will be taxed at the child’s marginal tax rate, which could be significantly higher depending on the tax brackets.

Other options do not accurately reflect tax law. For instance, stating that all of her unearned income is taxed at her parents' rate overlooks the initial tax-free threshold. Moreover, claiming that it is entirely tax-free due to her status as a dependent fails to recognize that while some of it can be exempt up to a certain amount, any income above that threshold will incur tax obligations, thus contradicting the idea of complete tax exemption. Lastly, suggesting that it is taxed at the