what are Qualified adoption expenses


R

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From the law

(1) Qualified adoption expenses
The term “qualified adoption expenses” means reasonable and necessary
adoption fees, court costs, attorney fees, and other expenses—
(A) which are directly related to, and the principal purpose of which
is for, the legal adoption of an eligible child by the taxpayer,

So the question is what is "other expenses"?

How about airline tickets to destination country to pick up child. I
would venture yes, but at around 3k it seems kind of expensive.

Lodging while in the foreign country. You don't just pick up the
child and come back home. You have to go there, do more paperwork,
get acquainted with each other, etc. I'm guessing this is really
pushing the envelope, but it is ordinary and necessary.

Driving costs. You'll be lots of driving in the US. It's a
bureaucratic nightmare, but you have to government offices, sometimes
in the state capital, as well as to the adoption office. I would
think these are deductible, but wonder whether you use business
mileage, business mileage minus the depreciation component, charitable
mileage, medical mileage, or actual expenses. And I guess some people
may fly to the required government offices.

Photocopy costs and notary costs. You'll be photocopy over 1000
pages, and notarizing over 100 pages. Seems allowed.

What are typical "other expenses"?


Second, how to divide expenses when adopting many kids from the same
adoption agency? Say if you adopt one kid the adoption fee is
$15,000. For two kids (say twins) the fee might be $18,000. On form
8839, they have

2. Maximum adoption credit per child = 11650 = 11650

So if you put $9,000 for each child that yields the best result
because you'll get a credit for the full $18,000 of adoption fees.
But if you put $15,000 for one and $3,000 for the other, you'll only
get $11,650 + $3,000 = $14,650.


And finally, if you don't have social numbers by 4/15/2010, then what
to do? Is it possible to file your tax return without claiming extra
exemptions and the adoption credit, but then file an amended return
when you get this info?

Incidentally it would be a good deal because the IRS would pay
interest, and their interest is better than the typical bank account.
 
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A

Alan

(1) Qualified adoption expenses
The term “qualified adoption expenses” means reasonable and necessary
adoption fees, court costs, attorney fees, and other expenses—
(A) which are directly related to, and the principal purpose of which
is for, the legal adoption of an eligible child by the taxpayer,

So the question is what is "other expenses"?

How about airline tickets to destination country to pick up child. I
would venture yes, but at around 3k it seems kind of expensive.

Lodging while in the foreign country. You don't just pick up the
child and come back home. You have to go there, do more paperwork,
get acquainted with each other, etc. I'm guessing this is really
pushing the envelope, but it is ordinary and necessary.

Driving costs. You'll be lots of driving in the US. It's a
bureaucratic nightmare, but you have to government offices, sometimes
in the state capital, as well as to the adoption office. I would
think these are deductible, but wonder whether you use business
mileage, business mileage minus the depreciation component, charitable
mileage, medical mileage, or actual expenses. And I guess some people
may fly to the required government offices.

Photocopy costs and notary costs. You'll be photocopy over 1000
pages, and notarizing over 100 pages. Seems allowed.

What are typical "other expenses"?


Second, how to divide expenses when adopting many kids from the same
adoption agency? Say if you adopt one kid the adoption fee is
$15,000. For two kids (say twins) the fee might be $18,000. On form
8839, they have

2. Maximum adoption credit per child = 11650 = 11650

So if you put $9,000 for each child that yields the best result
because you'll get a credit for the full $18,000 of adoption fees.
But if you put $15,000 for one and $3,000 for the other, you'll only
get $11,650 + $3,000 = $14,650.


And finally, if you don't have social numbers by 4/15/2010, then what
to do? Is it possible to file your tax return without claiming extra
exemptions and the adoption credit, but then file an amended return
when you get this info?

Incidentally it would be a good deal because the IRS would pay
interest, and their interest is better than the typical bank account.
I've seen a few Form 8839s and every one of them has expense that
exceeds the allowable amount. For 2008, the allowable amount was
$11650. So your query may be moot as adoption fees, court costs
and attorney fees are most probably going to exceed the ceiling.

Your reasonable & necessary travel costs plus meals and lodging
when away from home are qualified expenses. This includes
international travel. Anything else you spend money on that is
directly related to the adoption would also count. There is no
bright line test.
 
P

paultry

(e-mail address removed) wrote:


Driving costs. You'll be lots of driving in the US. It's a
bureaucratic nightmare, but you have to government offices, sometimes
in the state capital, as well as to the adoption office. I would
think these are deductible, but wonder whether you use business
mileage, business mileage minus the depreciation component, charitable
mileage, medical mileage, or actual expenses. And I guess some people
may fly to the required government offices.
This, from a response I received from (TaxHelp at
hal1.ausc.irs.gov) in January 2007, may provide information
about some adoption expenses, including travel expenses:

"Your Question Was:

What is the allowable standard mileage rate and M&IE rate
for personal travel for the purpose of adopting a child?
Which pubs or other documents contain these rates?

The Answer To Your Question Is:

Thank you for using our service. You will not find the
information on standard mileage rate or Meal and Incidental
Expenses (M&IE) since they do not apply to adoptions. For
purposes of adoption it is actual expenses. The cost of
meals, gas, oil, etc. Qualified adoption expenses include
reasonable and necessary adoption fees, court costs,
attorney fees, traveling expenses, including amounts
expended for meals and lodging while away from home, and
other expenses that are directly related to, and the
principal purpose of which is, the legal adoption by the
taxpayer of an eligible child. All reasonable and necessary
expenses required by a state as a condition of adoption are
qualified adoption expenses. The expenses may not be
incurred in violation of state or federal law or be
reimbursed under an employer or other program, other than an
adoption assistance program that satisfies these
requirements. Expenses incurred in carrying out a surrogate
parenting arrangement or in adopting a spouse's child are
not qualified adoption expenses. Rules similar to the
adoption credit rules apply to the adoption of foreign
children, filing requirements and basis adjustments. I hope
this information is helpful.

Reference: TAX RESEARCH CONSULTANT, COMPEN: 36,660;
IRM Code Section 23, Adoption Expenses.

This answer is based on our understanding of the facts you
presented in your question. Omission of facts may affect
the answer given."
 
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R

removeps-groups

I've seen a few Form 8839s and every one of them has expense that
exceeds the allowable amount. For 2008, the allowable amount was
$11650. So your query may be moot as adoption fees, court costs
and attorney fees are most probably going to exceed the ceiling.
There are twins, so the max amount is 11650 per child, or 23k total.
 

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