Client is in the process of adopting a child which they had in their household and supported all year. The adoption is not final and expect it to be in 2012. Could they claim the child as an exemption for 2011 seeing that they supported him all year?
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not sure
I think it might be the case that an adoption in process allows the child to be claimed as a qualifying child assuming that the other tests are met. Maybe someone who knows will weigh in on that. However, did you consider the possibility of using the qualifying relative theory? -
Zeros be prepared for the IRS to scrutinize this return
Zeros be prepared for the IRS to scrutinize this return. I am still fighting w/IRS for TY 2010 and there was an article on CNN about a month discussing how the IRS is looking over these return with a microscope.Comment
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The adoption doesn't have to be complete to satisfy the relationship test. Pub. 501 and Pub 17 make it clear: "The term 'adopted child' includes a child who was lawfully placed with you for legal adoption."
The IRS has been scrutinizing the refundable adoption credit, just like they did with the homebuyer credit. They'll probably do the same for children claimed for EIC purposes. Other than that, I haven't heard of any special handling when exemptions are claimed for kids who've been placed for adoption.
The rule exists because, at least for non-infant children, most states have mandatory waiting periods after placement before an adoption can be finalized.Comment
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