Adoption Credit Without Expenses?

[Possi]

My client has adopted a special needs child. He spent less than $800 on the adoption.

Special needs is documented.

He sent me the following link to prove that he can take the entire credit of $12,150 without having spent the money.

I am still searching to see if this is true. TTB 11-10 says "Limits apply to the total spent over all years for each effort to adopt an eligible child."

This link says not.

What say you?

http://www.dphhs.mt.gov/cfsd/adoption/federaladoptiontaxcredit.pdf

[S T]

Special Needs Adoption Credit

from IRS

http://www.irs.gov/taxtopics/tc607.html

Also see form 8839 instructions http://www.irs.gov/pub/irs-pdf/i8839.pdf

[oceanlovin'ea]

yes, it is true

You get a credit of $12,150 for each special needs child you adopt even if you spent no money.

You might remember some of my old posts about the family I know that adopted 9 kids - all special needs. They have so much carryover credit I wonder if they will ever use it.

Linda

[Possi]

Thank you so much!

And there I have it!

[Possi]

Good News

That is great! Thanks for the short cut to the instructions. I felt like it was true, but needed the documentation for myself.
It's a good way to bless the adoptive parents... I'm happy.....Thanks, too, Linda!

[taxea]

By their own admission this is NACAC's interpretation of the instructions. Is this what was intended by the law? Is this how the IRS interprets the law?

[MAMalody]

By their own admission this is NACAC's interpretation of the instructions. Is this what was intended by the law? Is this how the IRS interprets the law?

A quick reading of IRC 23(a)(3) indicates that the credit is available regardless of the amount spent, and 137(a)(3) indicates that the amount spent can be increased up to the full amount of the credit regardless of whether it was spent or not.

[taxea]

awesome...