An asset is placed in service on May 15, 2020 and has a depreciable basis of $40,000. The asset is in the 7-year recovery class and the half-year convention applies. What is the maximum depreciation deduction that may be claimed for 2020, assuming no election to expense and no bonus depreciation?

a.$5,144

b.$5,716

c.$25,000

d.$2,572

e.None of these choices are correct.

Carla and Bob finalized an adoption in 2020. Their adoption fees totaled $10,000. They have AGI of $238,520 for 2020. What is their adoption credit?

a.$4,000

b.$14,300

c.$7,263

d.$10,000

A taxpayer places a $50,000 5-year recovery period asset in service in 2020. This is the only asset placed in service in 2020. Assuming half-year convention, no immediate expensing, what is the amount of bonus depreciation?

a.$50,000

b.$10,000

c.$0

d.$25,000

e.None of these choices are correct.

Child and Dependent Care Credit (LO 7.3)

Marty and Jean are married and have 4-year-old twins. Jean is going to school full-time for 8 months of the year, and Marty earns $53,800. The twins are in day care so Jean can go to school while Marty is at work. The cost of day care is $8,600.

What is their child and dependent care credit?