As a self-employed person, you cannot receive a salary. You can take a draw from your business bank account to cover your personal expenses, but this has no impact on your taxes. You are taxed on your revenue minus expenses; you cannot subtract the draw.
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.