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We fostered two unrelated children with the intention of adopting them if parents' rights were terminated. At the start, the odds were that both cases would end with TPR. We spent a lot of money on attorneys' fees to intervene in one of the cases and for consultation regarding the other. Both children were reunified with their respective birth parents. Does anyone know whether we can consider these "failed adoptions" in terms of the federal adoption tax credit? I've searched the internet, but every time I see "failed adoption" in relation to the adoption tax credit, it's pertaining to a private adoption scenario, not adoption from foster care.
I'm not completely sure but I believe the tax credit would not apply to this situation since you were fostering the children and they were never legally free for adoption. You may want to call a tax specialist to make sure. Good luck and I am so sorry it didn't work out for you.
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My sense is that, if you subsequently complete an adoption, you may be able to roll some of the costs of your failed efforts into those costs, for tax credit purposes. Consult a tax professional.