Adopting a Kid for Tax purposes?

[Texas Proud]

Quote:

Originally Posted by Senator According to the questionnaire, "You can claim kid1 as a dependent." I had friends that went to Boarding schools. They came home on holidays and a few times during the year. They were dependents just the same, even though they spent well over half the year somewhere else. I actually think this is possible, assuming you could get the adoption completed, and get an SSN so the kid is a US Citizen.

I would like to see the answers you used... because the only way you get a Yes if you answer one of them wrong...

The child does not automatically become a US Citizen if you adopt... so that is a no...

my answers

Married, no
Citizen, no
National, no
resident alien, no
relationship, adopted
Birth date, any
Resident all year, no (see below for the exceptions, which this child does NOT meet)


Answer, does NOT meet the requirements....


Now, again, if you are willing to answer the questions incorrectly (IOW, commit fraud) then sure, you can claim them...


BTW, there are legal marriages that people enter into to try and get a green card etc., but they are prosecuted because it was fraud...








Note: A person is considered to have lived with you during periods of time when one or both of you are temporarily absent due to special circumstances such as:

• Illness,
• Education,
• Business,
• Vacation, or
• Military service.

Note: It must be reasonable to assume that the absent person will return to the home after the temporary absence.


(my change to red)

[haha]

Another slow day at ER.org?

[LARS]

Quote:

Originally Posted by haha Another slow day at ER.org?

Funny. I was thinking this bordered on "way too much time on your hands"... 🤔


Sent from my iPad using Early Retirement Forum

[REWahoo]

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?

[youbet]

Quote:

Originally Posted by REWahoo 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?

I guess that would depend on whether you bring anything home with you since "trying to make one" assumes no protection...........

[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]

Quote:

Originally Posted by youbet 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]

Quote:

Originally Posted by REWahoo 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?

Quote:

Originally Posted by gauss 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

Quote:

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]

Quote:

Originally Posted by Senator 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]

Quote:

Originally Posted by gauss 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]

Quote:

Originally Posted by 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

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]

Quote:

Originally Posted by pullmyfinger 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...d-species.html

[Walt34]

Quote:

Originally Posted by pullmyfinger 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.

Quote:

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.

Quote:

Originally Posted by Texas Proud I got curious and it looks like you can adopt almost anything... http://www.worldanimalfoundation.org...d-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]

Quote:

Originally Posted by ivinsfan 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]

Quote:

Originally Posted by Katsmeow 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]

Quote:

Originally Posted by Katsmeow 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.