Niles and Marsha adopted an infant boy (a U.S. citizen). They paid $17,500 in 20

Question

Niles and Marsha adopted an infant boy (a U.S. citizen). They paid $17,500 in 2016 for adoption-related expenses. The adoption was finalized in early 2017. Marsha received $3,600 of employer-provided adoption benefits. For question a) assume that any adoption credit is not limited by modified AGI or by the amount of tax liability.
A. What amount of adoption credit, if any, can Niles and Marsha take in 2017? $9,970 B. Using the information in question a), assume that their modified AGI was $222,000 in 2017. What amount of adoption credit is permitted in 2017? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) Niles and Marsha adopted an infant boy (a U.S. citizen). They paid $17,500 in 2016 for adoption-related expenses. The adoption was finalized in early 2017. Marsha received $3,600 of employer-provided adoption benefits. For question a) assume that any adoption credit is not limited by modified AGI or by the amount of tax liability.
A. What amount of adoption credit, if any, can Niles and Marsha take in 2017? $9,970 B. Using the information in question a), assume that their modified AGI was $222,000 in 2017. What amount of adoption credit is permitted in 2017? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)

Explanation / Answer

Solution:-

(a).Amount of adoption credit in 2017:-

Adoption expenses per child = $13,460

Adoption credit = 13,460 - 3,600

= $9,860

Adoption credit in 2017 = $9,860

(b).

The year 2017 adoption credit = $9,860

The preliminary credit will be like this ,

=[(241,920 - 222,000) / 40,000] * 9,860

= $4,910.28

The preliminary credit = $4,910.28

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