29 In 2015 Juan and Juanita incur 3000 in legal and adoption

29. In 2015, Juan and Juanita incur $3.000 in legal and adoption fees directly related to the adoption of an infant son born in a nearby state. Over the next two years, they incur another $2,000 of adoption expenses in cach of the years. The adoption becomes final in 2017. Which of the following choices properly stipulates the amounts and years in which the adoption expenses credit is available? 2015 $3,000, $3,000, None, None, $3,000 $2,000, None of the above. 2017 b. C. d. e. None, $3,000, None, $4,000 $7,000. $2,000. None, $3000, $400 30. Caleb and Zoe are married and file a joint tax return claiming their three children, ages 8, 10 and 18 as dependents. Their AGI for 2015 is $118,600. Caleb and Zoe\'s child tax credit for 2017 is: (The phase- out threshold for 2017 is S110,000) a. $O. b. $750. c. $1,550 d. $2,000. e. None of the above. 31. Mr. and Mrs. Golden are married and have one pre-school-aged child. During the year Mrs. Golden is employed and earns $15,500 while Mr. Golden is a full-time student for the entire year. The amount paid for child care is $3,500. On a joint return, the credit for child and dependent care expenses is (The applicable percentage is 35% at AGI of up to $15,000; 34% at AGI of $15,001-S 17,000; 33% at AGI of $17,001-$19,000; etc.): a. $700 b. $1,190. c. $1,225. d. $1,020. e. None of the above 32. Jermaine and Kesha are married, file a joint tax return, have AGI of $90,000, and have two children. Devona is beginning her freshman year at State University during Fall 2017, and Arethia is starting her Master\'s degree at Northeast University during Fall 2017. Both Devona and Arethia are claimed as dependent the ts on their parents\' tax return. Devona\'s qualifying tuition expenses and fees total $3,500 for fall semester, while Arethia\'s qualifying tuition expenses and fees total $4,250. Full payment is made for the tuition and related expenses for both children during the Fall 2017 semester. The Americarn Opportunity Tax credit available to Jermaine and Kesha for 2017 is: (The phase-out for married taxpayers filing jointly for the American Opportunity Tax credit is for AGI of $160,000-180,000) a. $2,375 b. $3,500 c. $2,250 d. $2,500 e. None of the above Page 10 of 11

Solution

Solution 29:

In case of domestic adoption, Qualified adoption expenses paid before the year the adoption becomes final are allowable as a credit for the tax year following the year of payment. Once an adoption becomes final, and subject to the dollar limitation, qualified adoption expenses paid during or after the year of finalization are allowable as a credit for the year of payment.

Therefore in present case adoption expense of $3,000 paid in 2015 will be allowable in 2016. Adoption expense of $2,000 paid in 2016 and 2017 will be allowalbe in 2017.

Therefore choice b is correct.

2016 - $3,000

2017 - $4,000