Adopting a Kid for Tax purposes?

[braumeister]

Maybe I'm misinterpreting this (I do that), but when I first saw the thread title I immediately thought of this:
Adopt A Goat - World Animal Foundation

 

[gauss]

Love the thread as a mental exercise.

You could get around the SSN requirement via either an ITIN or ATIN number issued by the IRS for those ineligible for SSNs (ie not legally allowed to work in US).

You could also explore foster child in lieu of full adoption.

Alas, the strategy will fail the residence test (ie "someone who lived with you all year as a member of your household")

-gauss

 

[MasterBlaster]

You could adopt some number of children. Not only would you get the tax breaks, you could also send them out to beg for money.

- Just think how rich you would be !

 

[gauss]

You forgot to add that married couples frequently pay higher taxes for the same income than two folks living together but not married due to the "marriage penalty."

Wasn't that eliminated a decade or two ago?

 

[Senator]

Wouldn't it be far more fun to fly to some third world country and spend a few weeks trying to make one rather than adopt one?

Yes. Especially with artificial insemination. It could be flown over if you wanted to avoid the travel expense.

I would also guess than many kids born right here in the USA have different fathers than what is on the birth certificate. I have heard a number as high as 10%.

So, one could claim being the father, and maybe you are wrong?

Wasn't that eliminated a decade or two ago?

Actually no.

Roth income limits are much different. Even healthcare subsidies when one has significantly lower income.

 

[gauss]

You may able to get this to work for a child who lives in Mexico that you adopted or is your foster child.

They may qualify for a dependency exemption as a Qualifying Relative.

You would need to pay more than half of their support and they could not have more income than the amount of the deduction (ie $4,000 in 2015).

Ref: IRS Publication 17

Child in Canada or Mexico.
You may be able to claim your child as a dependent even if the child lives in Canada or Mexico. If the child doesn't live with you, the child doesn't meet the residency test to be your qualifying child. However, the child may still be your qualifying relative. If the persons the child does live with aren't U.S. citizens and have no U.S. gross income, those persons aren't “taxpayers,” so the child isn't the qualifying child of any other taxpayer. If the child isn't the qualifying child of any other taxpayer, the child is your qualifying relative as long as the gross income test and the support test are met. You cannot claim as a dependent a child who lives in a foreign country other than Canada or Mexico, unless the child is a U.S. citizen, U.S. resident alien, or U.S. national. There is an exception for certain adopted children who lived with you all year. See Citizen or Resident Test , earlier.

Example.
You provide all the support of your children, ages 6, 8, and 12, who live in Mexico with your mother and have no income. You are single and live in the United States. Your mother isn't a U.S. citizen and has no U.S. income, so she isn't a “taxpayer.” Your children aren't your qualifying children because they do not meet the residency test. But since they aren't the qualifying children of any other taxpayer, they are your qualifying relatives and you can claim them as dependents. You may also be able to claim your mother as a dependent if the gross income and support tests are met.

 

[gauss]

Actually no.

Roth income limits are much different. Even healthcare subsidies when one has significantly lower income.

Good point. Taxable Social Security would probably be another biggie.

-gauss

 

[rodi]

Wasn't that eliminated a decade or two ago?

Not completely. There are small instances where marriage hurts you... HSA maxes are less for "family" than for 2 single people for example... Not as huge a penalty as in the past... but lots of little gotchas.

 

[pullmyfinger]

Maybe I'm misinterpreting this (I do that), but when I first saw the thread title I immediately thought of this:
Adopt A Goat - World Animal Foundation

That is hilarious! And my kind of adoption. I love the idea of getting a glossy photo of my goat and a goat adoption certificate.

 

[Texas Proud]

That is hilarious! And my kind of adoption. I love the idea of getting a glossy photo of my goat and a goat adoption certificate.

I got curious and it looks like you can adopt almost anything...


http://www.worldanimalfoundation.org/adopt-endangered-species.html

 

[Walt34]

That is hilarious! And my kind of adoption. I love the idea of getting a glossy photo of my goat and a goat adoption certificate.

Adopt An Animal Adopt A Goat Kits make great gifts and can be sent directly to the recipient. Simply supply the recipient's name and mailing address as shipping information. We'll even include a letter stating the Adopt A Goat is from you.

I got curious and it looks like you can adopt almost anything...


http://www.worldanimalfoundation.org/adopt-endangered-species.html

Oh, I am getting some ideas. Especially for DW's nephew who is a great guy but definitely "half a bubble off center" and my sister who once gave me a realistic-looking plastic doggy doo.

 

[Music Lover]

I've never understood why people with kids get such special treatment...back in the day we just got a standard deduction for each kid, not all the extra stuff you get now.

It's just vote buying. Politicians have been saying for years "we're going to help families". The translation is "screw the single people".

 

[Katsmeow]

I am struggling with not looking at the ethics of this. I am also as both an adoptee myself and as the mother of two children adopted internationally struggling with even the concept of the question. If it is meant to be humorous I think that it really is treating with humor something that isn't humorous. If not meant to be humor, it is even worse because it is treating a child as a commodity.

And, that is unfortunate because there are times when children internationally adopted are treated as commodities. Yes, most parents who want to adopt children just want to have children and want to adopt children who don't have parents who can raise them.

But, in the real world, there are all too many instances where there are people who treat children as commodities and the children are basically bought and sold. It is the dark side of international adoption. Of course, it is illegal but that doesn't mean it doesn't happen.

So to add to the other issues people have raised I will point out that you can't just give money to the mother and do what you are talking about. This risks running afoul of the laws against child buying.

 

[Senator]

So to add to the other issues people have raised I will point out that you can't just give money to the mother and do what you are talking about. This risks running afoul of the laws against child buying.

No one said anything about child buying. I am not really sure how adoption is not in actuality child buying anyway. People pay money, they get a kid. Not much different than a pet store or animal shelter. The parent may, or may not, get any money. A surrogate mother is also doing something similar to child buying.

This is an opportunity to look at the tax laws and attempt to minimize taxes. No different than a corporation would do. Look at the tax laws, analyze the ways to take advantage of them, and see if it is a fit. Simple Simon.

There are many deductions and credits for having children. The USD is strong, and there are many countries where you can live for pennies on the dollar. Taking advantage of that is good for both countries. When you buy stuff made in other countries, you are taking advantage of the same thing.

Adopting a kid, and then outsourcing it's raising, is no different than sending a kid to boarding school here in the USA, except a LOT cheaper. A kid raised in another country probably has a better life than being raised as a feral here in the USA. There are a lot of feral kids here.

From what I see, it could actually be a benefit to doing a support arrangement. Easily started and easily terminated. The child doesn't have to actually be adopted, just support provided. Where $3 a day sent could be what is needed for the majority of the kids support, or ~$1,000 a year. A person could get a decent tax reduction, perhaps up to twice+ the amount paid, the caretaker would get extra money.

 

[txtig]

I am struggling with not looking at the ethics of this.

+1. From the moment I read the initial post, I had a very uneasy feeling about this. The whole concept of adopting a child for the sole reason of receiving a tax break strikes me as being crass in the extreme. And the notion of giving a kid back if turns out to not be lucrative enough for you is just plain wrong. What you're describing is not adoption. Full disclosure: I'm the father of two adopted children, both grown, with one grandchild and another on the way. This hasn't been a money-making venture (quite the opposite), but I wouldn't change a thing.

 

[UncommonSense]

+1. From the moment I read the initial post, I had a very uneasy feeling about this. The whole concept of adopting a child for the sole reason of receiving a tax break strikes me as being crass in the extreme. And the notion of giving a kid back if turns out to not be lucrative enough for you is just plain wrong. What you're describing is not adoption. Full disclosure: I'm the father of two adopted children, both grown, with one grandchild and another on the way. This hasn't been a money-making venture (quite the opposite), but I wouldn't change a thing.

+2

My wife and I adopted two kids through the US foster care system whose parents lost their parental rights due to neglect. I would be wealthier without them, but wouldn't change a thing either.

 

[rodi]

I also am having problems with this. If you don't like the tax laws either work with your representative, run for office yourself, or vote in a representative that agrees with you. But the tax code is what it is.

The idea of having a virtual dependent for tax purposes is pretty cold and unfeeling.

I take advantage of the child credits. Just as I took advantage of the mortgage interest credits when I had a mortgage. I don't have one anymore - but I recognize the tax code benefits those with debt. There are a lot of things in the tax code that I disagree with.

People choose to have children... or not. The tax code is what it is. Looking for scams that actually involve real children is pretty low. JMO.

 

[Calico]

No one said anything about child buying. I am not really sure how adoption is not in actuality child buying anyway. People pay money, they get a kid. Not much different than a pet store or animal shelter. The parent may, or may not, get any money. A surrogate mother is also doing something similar to child buying.

This is an opportunity to look at the tax laws and attempt to minimize taxes. No different than a corporation would do. Look at the tax laws, analyze the ways to take advantage of them, and see if it is a fit. Simple Simon.

There are many deductions and credits for having children. The USD is strong, and there are many countries where you can live for pennies on the dollar. Taking advantage of that is good for both countries. When you buy stuff made in other countries, you are taking advantage of the same thing.

Adopting a kid, and then outsourcing it's raising, is no different than sending a kid to boarding school here in the USA, except a LOT cheaper. A kid raised in another country probably has a better life than being raised as a feral here in the USA. There are a lot of feral kids here.

From what I see, it could actually be a benefit to doing a support arrangement. Easily started and easily terminated. The child doesn't have to actually be adopted, just support provided. Where $3 a day sent could be what is needed for the majority of the kids support, or ~$1,000 a year. A person could get a decent tax reduction, perhaps up to twice+ the amount paid, the caretaker would get extra money.

Are you deliberately trying to offend adoptive parents and adopted children? To minimize the real scourge of human trafficking of children by equating it with adoption, and to equate adopted children with animals, are both beyond the pale.

As someone whose extended family includes multiple adopted children, this post is by far the most offensive and disgusting one I have ever read.

 

[Senator]

I take advantage of the child credits. Just as I took advantage of the mortgage interest credits when I had a mortgage. I don't have one anymore - but I recognize the tax code benefits those with debt. There are a lot of things in the tax code that I disagree with.

I agree, and you have helped confirmed my point. Is there an opportunity, or even a business opportunity, to take advantage of the tax laws? I do not understand why you might be against sending money to impoverished countries to help support children and getting a tax write-off.

A entity could be set up, similar to "feed the children" that matches people and a kid. Or it may be able to be done on an individual level. The support person would get a tax write-off, and a tax savings, larger than the amount contributed. Spend/send $1,000, get $2,000 back in taxes. Perhaps even the Government officials in the country would get some of the money to allow it, and confirm the transaction.

This type of opportunity would only likely work with kids from third world countries, as the cost of supporting them would be relatively cheap. A person, even if they were retired, could take advantage of this child deduction. Maybe even multiple deductions.

Why wouldn't others be able to take advantage of tax deductions, or credits, that may be legal and available? The same ones you are saying you take.

 

[rodi]

I agree, and you have helped confirmed my point. Is there an opportunity, or even a business opportunity, to take advantage of the tax laws? I do not understand why you might be against sending money to impoverished countries to help support children and getting a tax write-off.

A entity could be set up, similar to "feed the children" that matches people and a kid. Or it may be able to be done on an individual level. The support person would get a tax write-off, and a tax savings, larger than the amount contributed. Spend/send $1,000, get $2,000 back in taxes. Perhaps even the Government officials in the country would get some of the money to allow it, and confirm the transaction.

This type of opportunity would only likely work with kids from third world countries, as the cost of supporting them would be relatively cheap. A person, even if they were retired, could take advantage of this child deduction. Maybe even multiple deductions.

Why wouldn't others be able to take advantage of tax deductions, or credits, that may be legal and available? The same ones you are saying you take.

I don't think you DO understand my post. I was saying it was ok to take advantage of a tax advantage IF you qualify for it. I did not imply (I hope) that it was ok to create some false relationship to get a loophole. I was not endorsing your point of view. You seem to be looking for loopholes bordering on (or across the border) fraud. Truly makes me question your ethics. And worse, you seem to feel that children are somehow commodities. Whether you like children or not - even YOU were once a child... you'd think you'd recognize that they are not interchangeable objects to be used for tax advantage in some bizzaro scheme to defraud the government.

 

[Bestwifeever]

I knew a really nice guy in college who had been adopted from Mooseheart when he was in high school, whose adopted parents reaped intangible rewards of the heart far beyond any financial tax credits or deductions. I thought that was what this thread was going to be about.

 

[Katsmeow]

No one said anything about child buying. I am not really sure how adoption is not in actuality child buying anyway. People pay money, they get a kid. Not much different than a pet store or animal shelter. The parent may, or may not, get any money. A surrogate mother is also doing something similar to child buying.

This is incredibly offensive. Yes, child selling does exist. Most of the time the selling parent gets a pittance (is often a very poor person who has other children to support). The adoptive parent in that situation doesn't even know about it. The people who get rich are those in the middle.

But, that is not most adoptions. In most adoptions, the money paid is paid for services not for the child. And, you don't just pay money and get a kid. There are legal requirements that must be met. When we internationally adopted we went through a homestudy. We also had to submit documents and meet the requirements of the country that we adopted from. And, yes there was an agency involved who matched us with the children we adopted (whose mother had died, FWIW). The agency has employees who have to be paid. There is care for the children during the time between placement by the birth family and adoption. This all costs money. So, yes, it is paid for.
In addition to all that there are legal requirements that must be met that are based upon the best interest of the child.

As an adoptive parent, I find it pretty insulting to be accused of buying my children. As an adoptee myself, I find it insulting to my parents -- both my adoptive parents and birth parents -- to say that I was a commodity bought and sold.

And, frankly, this whole thread of making commodities of children is appalling. Adoption is meant to provide a home for children who need a home. Adoption is based upon the best interest of the child. Yes, there are people who act inappropriately. That doesn't mean it is appropriate to insult everyone who ever placed a child for adoption or who ever adopted a child.