Carl and Jenny adopt a Korean orphan. The adoption takes 2 years and two trips to Korea and his finalized in 2017. they pay $7000 in 2016 and $7500 in 2017 for qualified adoption expenses. In 2017 , Carl and Jenny have AGI of $150000.
if an amount is zero , enter 0 .
if required , carrycany division out of to four decimal and round final answers to the nearest dollar.
a. what is the adoption credit Carl and Jenny can claim in 2017?
b. How much credit could they claim if adoption falls through and is never finalized.
c. how much credit could they claim if they AGI was $206540?

Answer is explained below.

Explanation:

Part A.

As  per  Topic  607  of  IRS,  if  MAGI  amount  is  below  $203,540  for  2017,  your  credit  or  exclusion  won't  be  affected  by  the  MAGI phaseout ,  whereas  if  your  MAGI  amount for  2017  is  $243,540  or more, your credit or exclusion will be zero. Couple have AGI of $ 150,000. The  maximum  amount  (dollar  limit)  for  credit  in  2017  is  $  13570 per child.

Since  the  couple  have  incurred more  expenses  than  the  limit,  credit would  be  limited  to  $  13570  only

Part 2

Zero,  as  the  adoption  is  of foreign  child  and  it  is  not  successful.

Part 3

AGI                            $ 206540

Phaseout for 2017    $ 203540

Difference            $ 3000

Deduction             3000/40000x 13570 = $ 1017.75

Maximum Credit    $ 13570 - $ 1017.75 = $ 12552.25

i would say iii (3) because in order to compare a price you have to use as a reference other near stores because it's its

hope i explained myself