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Originally Posted By John & Justine Thomas

We paid an adoption agency $2,900.00 in 1998 and the balance of $3,100.00 in 1999. We have not been chosen by a birthmother yet. Can we take the $2,900.00 tax credit on our 1998 taxes? A friend who is a CPA told us NO we had to take the credit in 1999 but we called the IRS and they said YES we could take the amount we paid in 1998 ($2,900.00) on our 1998 taxes. We have read Publication 968 (Tax Benefits for Adoptions) but it is unclear. Which is it?
Thanks, John & Justine

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Originally Posted By Greg Franklin

Assuming that you are talking about a domestic adoption, as opposed to an international adoption, and that your income qualifies you to take the tax credit, you may take the credit in the tax year in which the expense was incurred. Therefore, expenses incurred in 1998 should be claimed on your 1998 taxes.

You are eligible to claim up to $5,000 per adoption attempt, per tax year.

Greg Franklin

Please note that this communication does not establish an attorney-client relationship between the parties to this message. Any comments or recommendations made in this communication are of a general nature, are based upon the limited information provided to the addressee, and are not to be construed or relied upon as legal advice.

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