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Daddy Warbucks Is in the Process of Adopting Annie from a New

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Essay

Daddy Warbucks is in the process of adopting Annie from a New York orphanage. He pays $5,000 in 2012, $7,000 in 2013, and $4,500 in 2014. Daddy Warbucks' AGI for 2014 is $165,000.

a. How much is the adoption credit that Daddy Warbucks may claim for 2014 if the adoption becomes final in 2014?
b. How much is the adoption credit that Daddy Warbucks may claim for 2014 if the adoption becomes final in 2015?
c. How much is the adoption credit that Daddy Warbucks may claim for 2014 if the adoption falls through and is never finalized?


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