Question

John and Joan pay $16,500 of qualified adoption expenses in 2018 to finalize the adoption of a qualified child. Their AGI is $197,000 for 2018. What is their adoption credit for 2018?

a.$13,460

b.$0

c.$13,810

d.$16,500

Taxpayer L has income of $55,000 from Norway, which imposes a 40 percent income tax, and income of $45,000 from France, which imposes a 30 percent income tax. L has additional taxable income from U.S. sources of $200,000 and U.S. tax liability before credits of $105,000. What is the amount of the foreign tax credit? Do not round any division in your computations. If required, round your answer to the nearest dollar.

a.$35,500

b.$16,500

c.$35,000

d.$45,000

e.$100,000

Answer 1

Ans - C -13810

The credit is not available to taxpayers whose income exceeds certain thresholds. The thresholds are indexed for inflation. In 2018 the credit begins to phase out at $207,140 of modified adjusted gross income and phases out entirely at income of $247,140.here the AGI is 197000 so eligible for credit. Taxpayers can receive a tax credit for all qualifying adoption expenses up to $13,810 in 2018. The maximum credit is indexed for inflation. Taxpayers may also exclude from income qualified adoption expenses paid or reimbursed by an employer, up to the same limit as the credit.

Ans-A-35500$

income from norway $55000*40% = 22000

income from france $45000*30% =13500

Totel = 35500

The IRS limits the foreign tax credit you can claim to the lesser of the amount of foreign taxes paid or the U.S. tax liability on the foreign income. For example, if you paid $35500 of foreign taxes, and on that same income you would have owed $105000 of U.S. taxes, your tax credit will be limited to $105000.

but here we take credit of 35500.