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Hey guys (and gals),
I see alot of info on what to do for the adoption tax credit..... but nothing current on a failed adoption with a pending adoption.
We had a failed adoption back in '09. We took placement (different child) back in early '10, but the adoption cannot be finalized yet. (I'd rather not get into that :grr: )
With that said.... I read alot last year about the tax credit and learned I could not claim the failed adoption for TY '09.... when I filed in '10..... I had to wait til I filed in '11. I had anticipated finalizing in 2010 and being able to claim the failed adoption expenses and the current adoption expenses..... but alas.... we haven't finalized yet :grr:
Now we are in '11 and I am about to file for TY 2010..... and I think I can file from the failed adoption.... but since we haven't finalized our current adoption, we can't file anything yet for it.
Since our situation is fairly unique...... can anybody give me some insight to what I can and can't do for this filing? (I have procrastinated til now)
FWIW.... I had been doing our taxes using TurboTax and e-filing..... and now understand I can still do TurboTax but I have to make sure I fill out form 8839 and from what I read..... I should file via snail mail.....
Anybody can steer me in the right direction?
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I don't mean to hijack the thread but I want to ask a similar question. I had a couple failed adoptions - the lagest was guatemala. I paid $25,000 (15 and then another 10) in 2008 to an agency that never got hague approved (and knew it when they stated the last 15 was due -uggh!) then as many know Guatemala closed and reopened. I never filed because although I have many beautiful photos/cd of "my" child it never came to fruition. Can I claim that this year? I never claimed anything because there wasn't an adoption. Does it matter that it was 2008? I did receive a foster placement in 2008 and adopted in 2009.
again sorry to the OP but you got me thinking, , ,
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gisellechloe
I don't mean to hijack the thread but I want to ask a similar question. I had a couple failed adoptions - the lagest was guatemala. I paid $25,000 (15 and then another 10) in 2008 to an agency that never got hague approved (and knew it when they stated the last 15 was due -uggh!) then as many know Guatemala closed and reopened. I never filed because although I have many beautiful photos/cd of "my" child it never came to fruition. Can I claim that this year? I never claimed anything because there wasn't an adoption. Does it matter that it was 2008? I did receive a foster placement in 2008 and adopted in 2009.
again sorry to the OP but you got me thinking, , ,
Diane may be able to answer your question more definitely, but I've been told that you cannot claim a credit for a failed adoption if it is an international adoption...at least that's how I understand that it works now. I don't know about back in 2008.
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DianeS
If they gave the money to you, then legally it is your money to do with as you wish.
If you then gave it to the agency, and the receipt for the money is in your name - then it IS allowable to claim that as money you spent and claim it against the adoption tax credit.
If it went directly from the relative to the agency, (and therefore the receipt is in your relative's name) then you can not claim it as your money for the adoption tax credit.
(You're welcome!)
On at least one occasion, the check was made out from the relatives account... and was signed by the relative and sent directly to the agency. So it looks like I am out of luck on that money. :grr:
One more thing.... :D
As I understand it.... I can get the credit each year (up to whatever the max is for that particular year) and if I have spent more than the max..... it (the remaining balance) can carry over to next year?
That would be cool. I may have this confused.....
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gisellechloe
I don't mean to hijack the thread but I want to ask a similar question. I had a couple failed adoptions - the lagest was guatemala. I paid $25,000 (15 and then another 10) in 2008 to an agency that never got hague approved (and knew it when they stated the last 15 was due -uggh!) then as many know Guatemala closed and reopened. I never filed because although I have many beautiful photos/cd of "my" child it never came to fruition. Can I claim that this year? I never claimed anything because there wasn't an adoption. Does it matter that it was 2008? I did receive a foster placement in 2008 and adopted in 2009.
again sorry to the OP but you got me thinking, , ,
Expenses for an in international adoption can only be claimed when the adoption is finalized. I'm sorry to tell you that you cannot recoup your expenses for your Guatemalan adoption attempt at all, because it wasn't ever finalized.
You can claim the expenses for the foster child adoption, starting in the year AFTER the expense was paid, or in the year the adoptio was finalized, whichever came first.
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gisellechloe
I don't mean to hijack the thread but I want to ask a similar question. I had a couple failed adoptions - the lagest was guatemala. I paid $25,000 (15 and then another 10) in 2008 to an agency that never got hague approved (and knew it when they stated the last 15 was due -uggh!) then as many know Guatemala closed and reopened. I never filed because although I have many beautiful photos/cd of "my" child it never came to fruition. Can I claim that this year? I never claimed anything because there wasn't an adoption. Does it matter that it was 2008? I did receive a foster placement in 2008 and adopted in 2009.
again sorry to the OP but you got me thinking, , ,
Expenses for an in international adoption can only be claimed when the adoption is finalized. I'm sorry to tell you that you cannot recoup your expenses for your Guatemalan adoption attempt at all, because it wasn't ever finalized.
You can claim the expenses for the foster child adoption, starting in the year AFTER the expense was paid, or in the year the adoption was finalized, whichever came first.
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Blazer406
As I understand it.... I can get the credit each year (up to whatever the max is for that particular year) and if I have spent more than the max..... it (the remaining balance) can carry over to next year?
That would be cool. I may have this confused.....
For your 2010 taxes, you are claiming the expenses you paid in 2009. You will claim EITHER the amount that you paid in that year, OR the maxium of the federal adoption tax credit for that year - whichever is SMALLER.
Example 1: If you paid $5,000 and the tax credit is $12,000 - you will claim $5,000. You are claiming the amount you paid in 2009, because it is the smaller of the two.
Example 2: If you paid $15,000 and the tax credit is $12,000, you will claim $12,000. You are claiming the total amount of the adoption tax credit, because it is the smaller of the two.
If example #1 applies to your situation, then you have remaining credit to use. On your 2011 taxes you can claim more expenses (those paid in 2010, and possibly those paid in 2011 if you finalize in 2011). You can keep claiming your expenses until you either run out of expenses or run out of credit.
But if example #2 applies to your situation, then you do not have any more credit that can be used. You have run out of the tax credit available to you. Even if you pay more money to complete the adoption, you can't claim any more against the adoption tax credit.
Make sense?
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DianeS
For your 2010 taxes, you are claiming the expenses you paid in 2009. You will claim EITHER the amount that you paid in that year, OR the maxium of the federal adoption tax credit for that year - whichever is SMALLER.
Example 1: If you paid $5,000 and the tax credit is $12,000 - you will claim $5,000. You are claiming the amount you paid in 2009, because it is the smaller of the two.
Example 2: If you paid $15,000 and the tax credit is $12,000, you will claim $12,000. You are claiming the total amount of the adoption tax credit, because it is the smaller of the two.
If example #1 applies to your situation, then you have remaining credit to use. On your 2011 taxes you can claim more expenses (those paid in 2010, and possibly those paid in 2011 if you finalize in 2011). You can keep claiming your expenses until you either run out of expenses or run out of credit.
But if example #2 applies to your situation, then you do not have any more credit that can be used. You have run out of the tax credit available to you. Even if you pay more money to complete the adoption, you can't claim any more against the adoption tax credit.
Make sense?
Yes... so if I had a magic wand and could control when I paid the expenses.... you would never "pay" more than the max allowable credit for that particular year..... then the adoption would in essence be free.... :-)
J/K ..... but wouldn't that be nice.
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Blazer406
Yes... so if I had a magic wand and could control when I paid the expenses.... you would never "pay" more than the max allowable credit for that particular year..... then the adoption would in essence be free.... :-)
J/K ..... but wouldn't that be nice.
I'm concerned that you may have misunderstood me... Once you max out the amount of credit available to you, you can't claim any more credit even if you have additional expenses in a different year. If you max out the amount of credit in 2010, and have finalization expenses in 2011, you're out of luck and can't claim the finalization expenses ever.
So the magic wand *I* would wish for is one that made adoption expenses more reasonable in general. :D
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DianeS
I'm concerned that you may have misunderstood me... Once you max out the amount of credit available to you, you can't claim any more credit even if you have additional expenses in a different year. If you max out the amount of credit in 2010, and have finalization expenses in 2011, you're out of luck and can't claim the finalization expenses ever.
So the magic wand *I* would wish for is one that made adoption expenses more reasonable in general. :D
I guess I did. I should have read more (recently) before I pop off and say something stupid :sick:
I guess then..... if I claim.... say 9k this year..... I didn't "max-out" and next year (TY 2011) I can claim whatever the difference is between the maximum for that TY and the amount I have claimed previously.
Is this accurate?
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Blazer406
I guess then..... if I claim.... say 9k this year..... I didn't "max-out" and next year (TY 2011) I can claim whatever the difference is between the maximum for that TY and the amount I have claimed previously.
Is this accurate?
Yes, bingo, you've got it! :clap: If you claim your $9K in expenses but the credit is, say, $12K, then you have $3K left to use and claim for a following year.
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DianeS
Yes, bingo, you've got it! :clap: If you claim your $9K in expenses but the credit is, say, $12K, then you have $3K left to use and claim for a following year.
Mucho Thanks!
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Well, I did what I was supposed to do I think...... and filed via snail mail. They got my return.... and then I only got part of my refund back..... then a week or so later... I get a letter from the IRS that they are holding part of my refund pending further review and list several reasons one of which is something about tax credits..... says something to the effect that I should have some resolution within 45 days.
Anyone else get this?
I assume this is not an audit....... yet.......
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You cannot claim the tax credit for a failed international adoption. However, if you use some of the paperwork for another international adoption, which is successful, you can include the fees for the reused paperwork in calculating the cost of the adoption that succeeded.
Sharon
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sak9645
You cannot claim the tax credit for a failed international adoption. However, if you use some of the paperwork for another international adoption, which is successful, you can include the fees for the reused paperwork in calculating the cost of the adoption that succeeded.
Sharon
I did not have an international adoption. I had expenses in TY 2009 that I filed for last year for a failed (domestic)adoption and got my full refund. This year, I have more expenses (from TY 2010) on a pending adoption and it totals more than the credit, so I filed for what "balance" I had left on the tax credit. I sent in all my paperwork I had as well. Hopefully this will be sorted out soon.
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Blazer406
Well, I did what I was supposed to do I think...... and filed via snail mail. They got my return.... and then I only got part of my refund back..... then a week or so later... I get a letter from the IRS that they are holding part of my refund pending further review and list several reasons one of which is something about tax credits..... says something to the effect that I should have some resolution within 45 days.
Anyone else get this?
I assume this is not an audit....... yet.......
Yep, this is the IRS' typical response to the adoption tax credit. You'll get lots of letters, you'll have to send in a bunch of stuff (that you already sent), you might have to show your receipts, and so on. Eventually you'll get the rest of your refund. Do a search here for "adoption tax credit" and you'll see lots of complaints about it, but pretty much it follows a *long* nonsensical pattern you just have to wait out. Hang in there!
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