In 2019, Mr. and Mrs. Baker transfer $20,000 to their granddaughter. The Bakers are in a 37% marginal tax bracket. Their granddaughter Bess, age 9, receives $4,000 of unearned income from the securities. Bess' parents marginal tax bracket is 24%. What is Bess' tax liability?
1) $0
2) $290
3) $432
4) $696