Question

Niles and Marsha adopted an infant boy (a U.S. citizen). They paid $14,500 in 2017 for adoption-related expenses. The adoption was finalized in early 2018. Marsha received $3,000 of employer-provided adoption benefits. For question (a), assume that any adoption credit is not limited by modified AGI or by the amount of tax liability.

1. What amount of adoption credit, if any, can Niles and Marsha take in 2018?

2. Using the information in question (a), assume that their modified AGI was $223,000 in 2018. What amount of adoption credit is allowed in 2018?

Answer 1

Answers Amount of adoption credit in 2018" * Amount of adoption credit can be upto $13, 810 per child. Con the Expenses incurred in adoption. whichever 1s λοωσι, The amount of eligible for credits = Sepiaces in curved - wimbursed by Employer I LO Expenses incurred = 14,500 nembussed of employs = 3,000 Now, Substitute values in Egn amount of eligible-for credits = 14,500-3.000 = $11,50). c's Amount of adoption credit in 2018 = $11,500

If the -credit can be AGB is less than f207140 -the whole ☺ taken. If the AGD up to $200,000, The credit would be phaned out at a percentage is, . 13810. 13810.- yoo 00 40,000 = 34,526% ~ 34.6% AGI = }(223,000 – 207140) x 34.6), = 15,860) X34.6). "=5487,56 $5488 Tax Credit's $11,500 - 5488 - $ 6012. - Taxe credits = $6012. Ti amount d adoption cordit is allowed in 2018 = $5012.