Lee and Whitney incurred qualified adoption expenses in 2012 of $2,000,and then incurred $7,000 more in 2013 when the adoption of their special needs child became final.Their 2012 AGI was $120,000 and their 2013 AGI was $140,000.The allowable adoption credit is

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The maximum adoption credit for each year is $6,000 indexed for inflation, which brings it up to $12,970 in 2013. Lee and Whitney can claim the full credit of $12,970 on their 2013 tax return because their AGI did not exceed the phaseout amount for that year. They cannot claim any credit for the $2,000 of expenses they incurred in 2012 because they did not finalize the adoption until 2013.

Lee and Whitney Incurred Qualified Adoption Expenses in 2012 of $2,000,and