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Maria and Luis adopted a baby girl from Texas in 2017, and incurred a total of...

Maria and Luis adopted a baby girl from Texas in 2017, and incurred a total of $16,000 unqualified adoption expenses. Their modified AGI is $210,000. What is the amount of the adoption credit they can take in 2017?
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Answer #1

The maximum adoption credit allowed in 2017 is $ 13570 for each child adopted in that year.

Maria and Luis can avail the credit for a maximum of 6 years.

Form 8839 is to be filled by the taxpayers to avail their amount of credit.

The child can be adopted via both public and private fosters.

The modified AGI should stand between $203540 - $ 243540.

If modified AGI exceeds $ 243540 then the credit will be zero.

The tax year is calculated when you have actually paid the expenses or the adoption is finalized.

According to question, Maria and Luis modified AGI is within the limits thus credit can be availed to a maximum of $ 13570 and remaining is taxable.

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