Ann and Bill were on the list of a local adoption agency for several years, seeking to adopt a child. Finally, in 2013, good news came their way, and an adoption seemed imminent. They paid qualified adoption expenses of $4,000 in 2013 and $11,000 in 2014. Assume that the adoption becomes final in 2014. Ann and Bill always file a joint income tax return.
a. Determine the amount of the adoption expenses credit available to Ann and Bill assuming that their combined annual income is $100,000. In what year(s) will they benefit from the credit?
b. Assuming that Ann and Bill's modified AGI in 2013 and 2014 is $200,000, calculate the amount of the adoption expenses credit.