Paul and Hannah,who Are Married and File a Joint Return,are

question 65

Essay

Paul and Hannah,who are married and file a joint return,are in the process of adopting a child who is born in December 2017.The child,a son,comes to live with them a week after his birth on December 12.The adoption is not finalized until February of 2018.What tax issues are present in this situation?

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Definitions:

Statement of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, dividing activities into operating, investing, and financing activities.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset from the time it was put into use to the current date.

Patents

Legal documents that grant an inventor exclusive rights to their invention for a certain period, preventing others from making, using, or selling it.

Operating Activities

Activities related to the core business functions of a company, including revenue production and expense payment, directly impacting its cash flow.