what are Qualified adoption expenses

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Subject Author Date what are Qualified adoption expenses removeps-groups@yahoo.com 09-24-2009  Re: what are Qualified adoption expenses Alan 09-26-2009  Re: what are Qualified adoption expenses removeps-groups@yahoo.com 09-27-2009  Re: what are Qualified adoption expenses paultry 09-26-2009
Posted by removeps-groups@yahoo.com on September 24, 2009, 6:18 pm Please log in for more thread options >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. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Alan on September 26, 2009, 8:38 pm Please log in for more thread options removeps-groups@yahoo.com wrote: >>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. > 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. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by removeps-groups@yahoo.com on September 27, 2009, 8:04 pm Please log in for more thread options > > 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. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by paultry on September 26, 2009, 10:05 pm Please log in for more thread options removeps-groups@yahoo.com 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." -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Re: Deducting adoption expenses incurred for an adoption that may September 17, 2006, 6:00 am Adoption Travel Expenses January 25, 2007, 2:05 am Scholarships and Qualified Educational Expenses July 25, 2009, 3:05 pm Adoption Expense Credit March 31, 2007, 9:55 pm Qualified Charitable Distribution from IRA January 7, 2007, 11:11 pm Qualified plans out of compliance June 29, 2007, 6:07 pm Qualified production activity? 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