Rolando and Silvia have modified AGI of $230,000. They adopted a boy from Guatemala, whose adoption became final in the current year. They incurred a total of $15,000 in qualified adoption expenses. What is the amount of adoption credit they can claim in the current year?

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Quizplus · Accepted Answer

The maximum adoption credit for 2020 is $14,300. However, the credit begins to phase out for taxpayers with modified AGI of $214,520 or more and is completely phased out for taxpayers with modified AGI of $254,520 or more. In this case, the taxpayers' modified AGI is $230,000, which is within the phase-out range. To calculate the credit, we need to subtract the taxpayers' modified AGI from the upper limit of the phase-out range ($254,520) and then multiply that result by the maximum credit amount ($14,300). The result is $3,688, which is the amount of the adoption credit the taxpayers can claim.

Rolando and Silvia Have Modified AGI of $230,000