Ann and Bill were on the list of a local adoption agency for several years, seeking to
Question:
Ann and Bill were on the list of a local adoption agency for several years, seeking to adopt a child. Finally, in 2016, good news comes their way, and an adoption seems imminent. They pay qualified adoption expenses of $5,000 in 2016 and $11,000 in 2017. Assume that the adoption becomes final in 2017. 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 $120,000. What year(s) will they benefit from the credit?
b. Assuming that Ann and Bill’s modified AGI in 2016 and 2017 is $220,000, calculate the amount of the adoption expenses credit.
Step by Step Answer:
South-Western Federal Taxation 2018 Comprehensive
ISBN: 9781337386005
41st Edition
Authors: David M. Maloney, William H. Hoffman, Jr., William A. Raabe, James C. Young