This is the only information provided on the question. I was not given any table

Question

This is the only information provided on the question. I was not given any tables

Niles and Marsha adopted an infant boy (a US. citizen). They paid $18,750 in 2016 for adoption-related expenses. The adoption was finalized in early 2017 Marsha received $3,850 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 a. What amount of adoption credit, if any, can Niles and Marsha take in 2017? b. Using the information in question (a), assume that their modified AGI was $227000 in 2017 What amount of adoption credit is permitted in 2017? (Do not round intermediate colculations. Round your final answer to the nearest whole dollar amount) a Amount of adoption credi b. Amount of adoption credit

Explanation / Answer

In 2017, the following events occur: (a) nails ans mansa pay $18750 of qualified adoption expenses in connection with an adoption of an eligible child; (b) their employer reimburses you for $3,850 of those expenses; and (3) the adoption becomes final. their MAGI amount for 2017 is less than $203,540. Assuming they meet all other requirements, they can exclude $3850 from their gross income for 2017. However, the expenses allowable for the adoption credit are limited to $14,900 ($18750 total expenses paid less $3,850 employer reimbursement).

b..when AGI is 227000

Adoption Credit

=

$14900

–

$14900

×

$227,000 – $201,010

$40,000

=

$14900

–

$14900

×

$25,990

$40,000

=

$14900

–

$9681.28

=

$5218.73

Adoption Credit

=

$14900

–

$14900

×

$227,000 – $201,010

$40,000

=

$14900

–

$14900

×

$25,990

$40,000

=

$14900

–

$9681.28

=

$5218.73

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