Problem 6: Tax Credits
Ted and Julia Higgins are married for all of 2023 with an AGI of $140,000, Taxable Income of
$100,000 and Tax Liability of $30,000. Their income includes $20,000 of dividends Ted earned
from investments in Germany. He paid $7,000 of taxes in Germany on that income.
They have one child, Sophia, who is 23 and a full-time student in her junior year at UCR. She
incurred $6,000 of expenses for tuition and books and $5,000 for room and board. All of her
expenses were paid by scholarships.
Required: What is the total amount of tax credits that the Higgins' can report on their tax
return?
