[Soon2bmomagain]

The rules are very vague!! Did anyone consult with a tax advisor before claiming the failed adoptions?

[mtbatch]

We just adopted an infant son from OKC, OK in September and our wonderful attorney there gave us the name/number to an attorney in Wash, DC who is knowledgeable @ tax credits and adoptions; my husband talked to him and he said we could get a tax credit for our failed adoption in June and also for the successful one we just had. Even though my husband is an accountant, we'll probably use this attorney when we do our taxes.
Take care

[wishforkids]

It is great to hear that my wife and I can claim this credit if our current possibility fails. We were afraid to go ahead with it because we have big hearts but not big wallets. This has made my day and thank you to those who have shared your stories and written how to claim this credit.

[Veloria]

I've been fretting about this because I had two failed adoptions this year and I am so in debt (I took out a home equity loan for funding). There is no way I can think of going forward again until some of this debt is gone (single woman and one income). Not to mention the fact that I needed an emotional break because having one work out was hard enough, not to mention two.

One question I have though. I've looked at the form and one of the first lines is for an ID number (like a social securty number or something). What do you put there? I do plan of seeing an accountant because this will be far more complex than any taxes I've had in the past.

Thanks for this thread!

[Dibby]

The tax credit guidelines from the IRS are unclear but now they have posted a table for those of us who are tax morons.

With Domestic adoptions, its true that you can claim expenses for a failed adoption but not until the year AFTER the payment (e.g. If you pay in 2004, you can't claim until you file for 2005).

If an adoption succeeds, you can claim the credit for the years taxes in which the adoption is finalized (e.g. finalized in 2004, claim on 2004 taxes). If its an International adoption, all expenses must be claimed the year the adoption becomes final.

Hope this helps!

[usocwazee]

[i]

One question I have though. I've looked at the form and one of the first lines is for an ID number (like a social securty number or something). What do you put there? I do plan of seeing an accountant because this will be far more complex than any taxes I've had in the past.

Thanks for this thread! [/b]

The answer to your question is you put nothing on the CID. We had a failed adoption and filled out all the forms correctly I called the IRS 10 times before I got someone who knew what to do. And when they pointed it out to me that its on the instructions exactly what to do I felt like such a fool. But its hard to find. Anyway,you write on the line where it asks for the childs name "see page 2" and on page 2 (which you will make yourself and add to your return) you will write that you had a failed placement and list all of your qualified expenses. Its that simple. I thought I had to give copies of all of my receipts but you do not need that. We got every cent back as a credit on our return. It works as long as you do everything correctly. I hope this helps.

[tall cool one]

We are currently on the waiting list of an adoption agency. If we get a match and pay expenses for a particular expectant birthmother considering adoption and then she decides to parent her child, we can claim that portion of the expense and any other expenses dealing with the failed match on the adoption tax credit independent of the $10,000 tax credit we will receive when we do have a successful adoption.

True or False?

[kinnj]

I called the IRS also, and you can take a credit for the failed adoption, however, it states that the failed adoption and the successful adoption are to be treated as one attempt. You can only take a total of 10,000 dollar credit for both attempts. At least that is what the person at irs told me.
KINNJ

[mmdd2b]

Hello,
We had two failed placements in 2004. One 6 months of expenses for one bmom. I am new to this thread, can someone pm the details on where to start, get the right forms, etc.

I hope to have a new match soon.

Kristy

[wanttobeparents]

The place to start is:
http://www.irs.gov/pub/irs-pdf/p968.pdf

If you call the IRS, you will get a different answer from each person you reach. For 2004, the credit was raised to $10,390. If your adoption attempt was domestic, you should be able to take a seperate credit for each attempt. You only get the actual expenses for the attempt. The new rules for 2004 are in this publication.

I hope that you will be able to take a credit for a successful adoption next year!

Peggy

[ToniToot]

Our failed adoption was in November 2004. All of our expenses were in 2004. When can I file for that credit? I thought it would be on the 2004 return but I was told by H & R Block that it would be the 2005 return. I don't agree with them. Any help would be appreciated.
I want to be able to adopt again and the credit would be a great help.
Also do I understand correctly that even though we had the failed adoption in 2004 and will apply for the credit then, that we can still claim the full credit if we have an adoption in 2005?

[wanttobeparents]

Looks like H&R Block is right for 2004.

From page 3 of IRS publication 968:
http://www.irs.gov/pub/irs-pdf/p968.pdf

Child who is a U.S. citizen or resident. If the eligible
child is a U.S. citizen or resident, you can take the adoption
credit or exclusion even if the adoption never becomes final.

Take the credit or exclusion as shown in the following
tables.

IF you pay qualifying
expenses in...
any year before the the adoption becomes final

THEN take the credit in...
the year after the year of the
payment.

[ToniToot]

I am still a little confused. The adoption never will become "FINAL" in that sense of the word. It is final however when the birthmom told us "NO". Why not take the expenses in 2004 when she said no in 2004?

[wanttobeparents]

Toni,

You are asking the IRS to make sense? You are asking for instructions to not be confusing?

The best you can do is read the publication in full, and follow the instructions step by step. Keep a copy of the publication in case of audit so you can read the instructions out to the person at the IRS. I don't try to understand, just follow the directions like a good little taxpayer.

Peggy

[blessedx3]

We paid adoption expenses in 2001 and had a failed adoption in 2003. We were told by the IRS that we could claim this on our taxes, which we did. Well, we were audited and had to pay interest penalties. The adoption credit is very difficult to understand and even the people who should know the answers, don't.