The exclusion of up to $5,000 for death benefits no longer applies. It had applied only for employees who died before August 21, 1996. Only a death gratuity paid to a survivor of a member of the Armed Forces continues to be excludable from gross income.
The tax on the investment income in excess of $1,700 (may change after 2007) of a child under age 18, based on the parents’ marginal tax rate and computed on Form 8615.