[Genevieve]

Hello - I was wondering if anyone can tell me when a China adoption is finalized, because I am interested to know in what year I will be able to take the tax credit.

Is it finalized in China or when I return to the States? If it's when I return to the States, how long does it take after my return?

Thanks!
-Genevieve

[lynnellen]

It is my understanding that it is finalized in China... so the year that you get your baby is the tax year you will have the credit in.

[mythreesons+]

I have a friend that is an accountant. She gave me an update that the IRS put out to answer this question. I don't have it with me it is at work but the best I remember is that you actually have up to two years to readopt in your state and take the credit.

Granted most people would want to take it ASAP (the year you come home with the child) but in our case we were wanting to know how/if we could delay. We have a rental house we were thinking of selling so we didn't want to go over the income limit for the year and not be able to use the credit.

http://www.mellon.com/hris/pdf/fyi_07_19_05b.pdf

The above link gives the new guidance on when an adoption is final.

Cindy

[Mailbox13]

According to what our agency has told us, if both parents travel, the adoption is considered finalized at the American Consolate in China. Some states require you to "re-adopt" when you return, but this wouldn't affect your federal tax return.

If only one parent travels, that changes things a little. It may not be considered finalized until the re-adoption. I am not as sure about this situation.