Question

In late 2016, Randy and Rachel Erwin paid $8,300 in legal fees, adoption fees, and other expenses directly related to the adoption of an infant son, Jameson. The adoption becomes final in 2017, and the Erwins then pay an additional $9,545 in adoption fees. Their 2017 AGI amounts to $190,895. a. Randy and Rachel are eligible for a $ 13,570 adoption credit in 2017. b. If the Erwins' 2017 AGI is $222,200, adoption tax credit is $ . (Round any division to three decimal places and round your final answer to the nearest dollar.)

Exercise 12-15 (Algorithmic) (LO. 4) In late 2016, Randy and Rachel Erwin paid $8,300 in legal fees, adoption fees, and other expenses directly related to the adoption of an infant son, Jameson. The adoption becomes final in 2017, and the Erwins then pay an additional $9,545 in adoption fees. Their 2017 AGI amounts to $190,895. a. Randy and Rachel are eligible for a $ 13,570 ✓ adoption credit in 2017. x. (Round any division to three decimal places and round b. If the Erwins' 2017 AGI is $222,200, adoption tax credit is $ your final answer to the nearest dollar.) Feedback Check My Work Adoption expenses paid or incurred by a taxpayer may give rise to the adoption expenses credit. The provision is intended to assist taxpayers who incur nonrecurring costs directly associated with the adoption process, such as adoption fees, attorney fees, court costs, social service review costs, and transportation costs.

Answer 1

ANSWER

B) $10564

Amount of couple's 2017 adoption tax credit if AGI is $222,200 then,

The amount of the credit is reduced as follows.

($222,200 - $203540)/$40000=0.4665 or 46.65%

$13,570--(46.65% of $13,570)

=$13570--$6,330

= $7,240 amount of adoption tax credit

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