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Tax Law (Questions About Taxes)/Foreign Adoption
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Question
Dr. Stancil, In 2008 we finalized an adoption. We began the process in 2007 (spent $8000) looking at one child which ended when the agency had problems. We started again with a new agency in 2008 (spent $25000) and were successful in adopting a different child. My Question? Can we take a tax credit (Form 8839) in 2007 for what we spent and another tax credit in 2008? Or are we limited to one tax credit? Also, we had some additional adoption expenses in 2009, is there deduction available for these 2009 expenses?
Millers,
Thanks for your question.
The credit is limited to $11,650 for 2008. Since it is a foreign adoption, you can only deduct expenses in the year in which the adoption became final. This it is total amount for each adoption, not for each year.
This means you get no credit for the $8,000 and can take a credit of $11,650. Since you have maxed the credit, the 2009 expenses will not be eligible for additional credit or deduction.
Hope this helps.
John Stancil, CPA
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John Stancil, CPA
Expertise
I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 35 years. I am a member of the AICPA, National Association of Tax Professionals, and the Institute of Management Accountants. Visit my website at www.johnstancilcpa.com. Also visit my blog, www.thetaxdocspot.com. Prepare and file your own taxes at www.1040stancilcpa.com
Experience
I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CGMA, and CFM. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 30 years and have taught accounting and tax at the college level for over 30 years.
Organizations
AICPA, FICPA, IMA, NATP
Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly.
Education/Credentials
DBA University of Memphis
MBA University of Georgia
BS in Accounting Mars Hill College
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