[Archive]

Originally Posted By Scott

We suffered a failed adoption in April this year and a big $$$ loss, I was wondering if I can claim this loss for the tax credit this year? Two months later we were selected to become adoptive parents and how does this adoption related to the tax credit? If anyone could help it would be greatly appreciated.

[Archive]

Originally Posted By Kay

I do know that you need to get a statement from your attorney, agency, etc. for the amount of loss from your trust. If you can't get that and you have receipts, keep them for all travel expenses and other expenses you incurred. Take that to your tax preparer and they should be able to go from there. You can get up to $10,000 back if you fall under $150,000 and it goes down until $190,000, even if it never finalized. This is for a US adoption only. I am so sorry for your loss. We continue to grieve.

[adoptare]

The expenses you paid for the failed adoption and the expenses you paid for the successful adoption must both be applied towards one $10,000 credit. According to IRS Form 968:

"The amount of your adoption credit or exclusion is limited to $10,000 for each effort to adopt an eligible child. For this purpose, an attempt that leads to the successful adoption of a child and any unsuccessful attempt to adopt a different child are treated as one effort." See http://www.irs.gov/pub/irs-pdf/p968.pdf

On a related note, I am researching whether the adoption credit can be taken even in the absence of a successful adoption. My wife and I had an adoption fall through last week. Form 968 says:

"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." The form then becomes confusing because it determines when you can take the credit based on when it becomes final, which it just claimed was unnecessary in order to take the credit. I would appreciate hearing from anyone who claimed the credit for a failed adoption without getting nailed by the IRS.

[wdean20]

I am currrently struggling with the same situation. However there is another hitch that I have stumbled upon. When I decided to claim my failed adoption for 2002 the tax forms want the childs SS#. So obtain that if you can.

[adoptare]

The instructions for Form 8839 for adoption expenses seem to anticipate the problem of not having enough information, including the SS#, in a failed adoption.

The specific instructions for Line 1 say that "If you cannot give complete information because you tried to adopt an eligible child but were unsuccessful..., complete the entries you can on Line 1." It then instructs you to put the name and address of the adoption agency or attorney on page 2 of Form 8839.

[wdean20]

I am using turbo tax to do my taxes. And all need to know that if you are in this situation turbo tax will not let you e-file if you do not have the ss#. This is a flaw in their program. I have to send my taxes in by mail. This was instructed by a Turbo Tax rep.

[led]

I found great information on the tax credit on the Adoption Learning Partners website, www.adoptionlearningpartners.org. It takes you through examples of each type of adoption and explains everything pretty well. I know they talk about failed adoptions and how that is counted.