Carl and Jenny adopt a Korean orphan. The adoption takes 2 years and two trips t
ID: 342401 • Letter: C
Question
Carl and Jenny adopt a Korean orphan. The adoption takes 2 years and two trips to Korea and his finalized in 2017. they pay $7000 in 2016 and $7500 in 2017 for qualified adoption expenses. In 2017 , Carl and Jenny have AGI of $150000.
if an amount is zero , enter 0 .
if required , carrycany division out of to four decimal and round final answers to the nearest dollar.
a. what is the adoption credit Carl and Jenny can claim in 2017?
b. How much credit could they claim if adoption falls through and is never finalized.
c. how much credit could they claim if they AGI was $206540?
Explanation / Answer
A. Adoption Credit carl and jeny Clain in 2017 is Upto $ 13,570 Per Child as per the Adoption Credit rule of the year 2017 where as actual Expenses is $ 14,500 ($ 7000 in 2016 + $ 7500 in 2017)
B. Even though if adoption falls through and is never finalized the credit limit is $ 13,570 Per child but if the same time period individula try to adopt another child and expenses of that also be come under the same credit no sepreate credit allowed.
C. If they Claim AGI was $ 206,540 Than the credit exclusion affect on phase out manner in between $ 203,540 to $ 243,540 it become Zero. So, At AFI $ 206,540 the credit could claim is [ $ 12,552.25 ($ 13570 * ($ 240,540 - $ 206,540) / ($ 243,540 - $ 203,540) ]