Claiming exemption for Adopted Child

[WhiteOleander]

All the info I can find about claiming an adopted child pertains to the person who "got" the adopted child, not the person who "released" the child for adoption.

If a person releases their child to the state to be adopted, can they claim the exemption for that child? The situation is, mother had custody and supported the child in her household until August. The child is now no longer her child. Can she claim the child for all tax purposes for 2009 since she had the child more than half the year?

She has to give up all rights to the child in order for the child to be adopted. So, does that means she also gives up IRS rights?

Thanks

[Edsel]

Support

I'm going out on a limb here, but I believe the question would be answered by the level of support for the entire year.

For example, if a parent supported a child for 10 months, then gave it up for adoption, and the state placed the child with foster parents for the final two months, then I believe the natural parent would be entitled to the deduction.

Conversely, if the natural parent supported a child for only 2 months, and someone else supported the child for the remainder of the year, the new supporter would be entitled to the deduction.

I suppose there may be a situation where NO ONE furnished over 50% of the support, if there were many multiple providers, including the state itself, over the course of the year. In such a case no one may claim the deduction. This isn't always popular with clients when they find this out, because the some providers often believe they have an unalienable right to the deduction - especially natural parents.

[taxdude71]

Support is part of it. I've delt with this before and the main part is if the adoptive parents finailized the adoption prior to Dec 31. If so, they can claim the child regardless of support and no one else can. If not, then it is a matter of support.

[Earl]

Qualifying Child

Child meets all the requirements to be a qualifying child of the mother. Support does not enter into the equation unless the child provides over half of its own support. Therefore with the information provided the mother is the only one who can claim the child.

[Edsel]

That's What I like

Oleander, that's what I like about our forum. You have three different responses telling you three different things.

Brings back memoirs of the Money Magazine annual tax practitioner reports. Remember some fictitious guy going to 50 different tax "experts" and getting 50 different bottom lines on their refunds/amounts due? The authors of the article always had their version of the solution, but again, that was only "their" rendition.

Sometimes I really wonder if there are any such things as tax "experts." Certainly not me. I know parts of taxation as well as most people but the overwhelming body of tax law I only know enough to fill out someone's return if it is not very involved. Sometimes I can get complex situations properly reported if I research - sometimes even that doesn't help.

[taxdude71]

I refer you to Tax Book page 3-18. "adopted child is always treated as the taxpayers child". That's all that needs to be said.

[David1980]

I refer you to Tax Book page 3-18. "adopted child is always treated as the taxpayers child". That's all that needs to be said.

So you effectively have mommy #1 and mommy #2. Child lived with mommy #1 for the first 7 months of the year, and child lived with mommy #2 for the last 5 months of the year. Does it matter whether the child is treated as the taxpayers child for mommy #2?

[WhiteOleander]

I'm wondering if the adoption goes through before the end of the year, if the adoptive parents get to claim the child as if the child had been with them for the entire year. Just as if the child had been born on the last day of the year the child is considered to have lived with the parents for the whole year. I'm still looking for something on this.

[taxdude71]

That is my understanding. The statute reads that if the child is placed in the household with the purpose of adoption (law a little fuzzy here) or if adoption is done (clear) that is treated as taxpayers child. Treated as child means you can claim for entire year. There is nothing regarding support.

[PIGLEE]

Most adoptions that go thru an agency, there is no question. But a few years ago I had a case where there was a personal adoption. We claimed the child, but the natural mother also claimed the child. Client got letter that child had been claimed on both returns. My client did not want to fight it, they were so glad to get the baby. I did not do any more research on it. But it is a big question, in which I don't think there is any easy answer. I am interested in any research that comes up on this issue.

[Earl]

Adoption

When child adopted the adoptee can consider the child as their child. However, I would think that they would have to meet the other qualifications for dependency. Chiefly in this case over 6 months in home. Child given up for adoption would still be child of the natural parent even though they have no legal rights to child. SInce they meet the relationship requirement if they meet the other requirements I feel that they have right to claim child.

Just my opinion with nothing concrete to back up.

[taxdude71]

I've had this happen before. Bottome line is if the child is legally adopted by Dec 31 IRS will recognize as dependent. Support has no bering. Birth mother has no legal right to claim child as adoption proceedings entail giving up parental rights.

[New York Enrolled Agent]

That is my understanding. The statute reads that if the child is placed in the household with the purpose of adoption (law a little fuzzy here) or if adoption is done (clear) that is treated as taxpayers child. Treated as child means you can claim for entire year. There is nothing regarding support.

I think you are mis-interpreting some of this.

Section 152(f) contains in part:
(1) Child defined.

(A) In general. The term “child” means an individual who is—

(i) a son, daughter, stepson, or stepdaughter of the taxpayer, or

(ii) an eligible foster child of the taxpayer.

(B) Adopted child. In determining whether any of the relationships specified in subparagraph (A)(i) or paragraph (4) exists, a legally adopted individual of the taxpayer, or an individual who is lawfully placed with the taxpayer for legal adoption by the taxpayer, shall be treated as a child of such individual by blood.


That section says the adopted child is considered to be a child. It does not mean that the child is a qualifying child as pointed out by Earl. Under §152(c) and (d) a "child" could be a "qualifying child", a "qualifying relative" or neither.