I don't know what sort of wood that guitar is made of, but it looks extremely toxic. At a glance, I'd say some deadly chemicals were accidentally mixed in with the lacquer. If you look very closely, that "herringbone" binding is actually little skulls and crossbones.

For both your own health and that of your kid, you should immediately send it to:

The Stringed Instrument Detoxification Center
2942 Walling Road
Milton, FL 32570

We will keep it under our care until we're sure the toxicity has dissipated to the point of no longer posing a danger, a process that usually takes ten or twelve years. This is an absolutely free service. All you have to do is pay shipping charges.