Ann and Bill were on the list of a local adoption agency for several years seeking to

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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 comes their way and an adoption seems imminent. They pay qualified adoption expenses of $4,000 in 2013 and $11,000 in 2014. 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 if their combined annual income is $100,000. What year(s) will they benefit from the credit?
b. If Ann and Bill’s modified AGI in 2013 and 2014 is $200,000, calculate the amount of the adoption expenses credit.

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South Western Federal Taxation 2015

ISBN: 9781305310810

38th Edition

Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young

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