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To add some more confusion to the adoption tax credit issue...
I called IRS yesterday because we had failed placement in 2003, and the publication says you cannot take the credit till the year after the payout. So therefore, we can take the credit this year. In addition, we had a sucessful adoption in 2004. We cannot take credit for this adoption till 2005 return. The lady at the irs said that I can deduct whatever I paid in 2003 on the 2004 form as long as it doesn't exceed 10,390 and I can deduct another 10, 390 in 2005 on my 2004 form. I have heard both senarios that you can and cannot take 2 deductions for 2 seperate attempts. I wrote her name and id number down, so that if I am audited, I have some documentation that she said this.
I know this does't help, but maybe someone can clear up this issue.
It is a shame to have such a great benefit that noone knows how to use.
KINNJ
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