Martha and Lew are married taxpayers with $400 of foreign tax withholding from dividends in a mutual fund. They have enough foreign income from the mutual fund to claim the full $400 as a foreign tax credit. Their tax bracket is 25 percent and they itemize deductions. Should they claim the foreign tax credit or a deduction for foreign taxes on their Schedule A?

Since deducting the taxes will result in a $ ??

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Carl and Jenny adopt a Korean orphan. The adoption takes 2 years and two trips to Korea and is finalized in 2017. They pay $7,000 in 2016 and $7,500 in 2017 for qualified adoption expenses. In 2017, Carl and Jenny have AGI of $150,000.

If an amount is zero, enter "0".

If required, carry any division out to four decimal places 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 the adoption falls through and is never finalized?

c.How much credit could they claim if their AGI was $206,540?