Question

6. Guillermo and Nora adopted a little boy in 2020 and incurred a total of $18,000 qualified adoption expenses. Their modified AGI is $220,000. What is the amount of adoption credit they can take

Answer 1

Guillermo and Nora

The amount of adoption credit that they can take is limited to:

= $14,300 in 2020.

Step-by-step explanation:

a) Data and Calculations:

Modified AGI of Guillermo and Nora = $220,000

Total amount of qualified adoption expenses incurred in 2020 = $18,000

Limit of adoption credit available to the couple in 2020 = $14,300

Lost adoption expenses = $3,700 ($18,000 - $14,300)

b) The couple will not be able to take adoption credit amounting to $3,700 because the amount they spent on adoption expenses exceeded the adoption credit limit for 2020.