Adoption Credit

[JOHNBURLESON]

My client adopted a special needs child in 2005. They have this and several other children and
had no taxable income in 2005, 2006, 2007, 2008, & 2009. I understand that the unused
credit from 2005 is refundable in 2010 for the first year. Must we file amended returns for each year to carry it forward to 2010 or is there an easier process available? Thanks, John
john_burleson@hotmail.com.

[DaveO]

Yes you must file the amended returns. The form instructions give a pretty clear example.

[AZ-Tax]

Reminder to keep good adoption exps records.

My client adopted a special needs child in 2005. They have this and several other children and
had no taxable income in 2005, 2006, 2007, 2008, & 2009. I understand that the unused
credit from 2005 is refundable in 2010 for the first year. Must we file amended returns for each year to carry it forward to 2010 or is there an easier process available? Thanks, John
john_burleson@hotmail.com.

John, I prepared an adoption finalized in 2010. I also prepared one in 2006. The form has changed over the years and now asking for the exps to be catergorized. I not only caterorized their adoption related exps but scan every document receipts etc. Now that the credit is refundable, I read the IRS is going scrutinize these returns even more. I will be teaming up with a local Adoption agency to offer help in both catergorizing and scanning documents plus preparing their tax return.

[oceanlovin'ea]

Special needs children don't need the receipts and documentation.


Linda, EA