[claschober]

My tax guy can not find out where it states if we can claim legal fees on a failed adoption. I thought that we could, however now I am wondering if we can or not....does anyone know if fees can be claimed if the adoption was never finalized? The fees are from 2004, so I know if we can claim them, we need to this year...

He also asked me what a "special needs" child is according to the tax credit. I know what our county constitutes as special needs, but is there a criteria for a special needs child when it comes to the tax credit? I am asking since a special needs child changes what we can or can not claim w/ our children that we are currently adopting.

Thanks in advance for any help!!!

[chrisandaaron]

I did receive the credit for expenses paid in 2004 for a failed adoption this past year. I just checked the box that said it was not finalized. I will try to find the place where it states you can (at least for federal). Our state also has a small credit, but it doesnt' apply to failed adoptions.

[Casey677]

I also received one for a failed adoption. It can be done!!!

[chrisandaaron]

I found this on the IRS website regarding "special needs adoption" (topic 607). I know I saw the other somewhere, but I couldn't find it. I will look again tomorrow.
"....An eligible child is also a child with special needs if he or she is a United States citizen or resident and a state determines that the child cannot or should not be returned to his or her parent's home and probably will not be adopted unless assistance is provided. Under certain circumstances, the amount of your qualified adoption expenses may be increased if you adopted an eligible child with special needs. "

[chrisandaaron]

Here are the directions on how to fill out the form in the case of a failed adoption. Tell your tax guy I want a cut of the big bucks you are probably paying him!

http://www.irs.gov/instructions/i8839/ch02.html

[claschober]

Chris -

Thank you for taking the time to answer my questions....I will let my tax guy know you want a cut of his fees

[sak9645]

You can take the credit for failed domestic adoptions, but not for failed international ones.

Sharon

[sak9645]

Likewise, the favorable treatment for special needs adoptions applies ONLY to domestic special needs adoptions, not international ones.

Basically, if your state defines the child as having special needs, the IRS is likely to accept that.

Sharon