Vincent and Maria,whose modified AGI is $164,000,adopted a little girl from Mexico which was finalized in 2016.They incurred a total of $16,000 in qualified adoption expenses.What is the amount of adoption credit they can claim in 2016?

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The maximum adoption credit for 2016 is $13,460, and it is phased out for taxpayers with modified AGI between $201,920 and $244,920. Since Vincent and Maria's modified AGI falls within this range, their adoption credit will be reduced. The credit is calculated as a percentage of their adoption expenses, up to the maximum credit amount. In their case, the credit is 20% of $16,000, which equals $3,200. However, since their modified AGI is above $201,920, their credit is reduced by $160 for every $1,000 above that threshold. In their case, the reduction is $160 x 36, or $5,760. This reduces their credit from $3,200 to $440. However, since the adoption was finalized in 2016, they can claim the entire credit on their 2016 tax return. Therefore, the amount of adoption credit they can claim in 2016 is $440.

Vincent and Maria,whose Modified AGI Is $164,000,adopted a Little Girl