unumpr[at]bellsouth.net (Tj) wrote:

- quote -

It's widely believed that "entire year" means just that.
Starting January 15 means it isn't the entire year.

Foster children also have to pass the support test. If you
are receiving cost-of-care payments or take cost-of-care as
a charitable contribution, these amounts cannot be counted
toward support.

All is not lost; there are other tax advantages that may
work in your situation:

* If the children were placed for eventual adoption by you,
they are considered adopted, not foster, even if the
adoption is not yet final.

* Reimbursed cost of caring for a foster child is largely
tax-exempt.

* Unreimbursed cost of caring for a foster child can be a
charitable deduction. This may actually be more valuable
than the dependency exemption.

Organizations such as Casey Family Programs have lots of
information on how to deal with the tax and financial
situations that foster parents find themselves in. See
in particular
http://www.casey.org/Resources/Publi...axBenefits.htm

--
Chris Green

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- quote -

That's a good question, considering the child lived with you
IN 12 months of the year. However, the rule as stated below
seems to make it clear that the child must have lived with
you from 01/01/04 thru 12/31/04 in order for you to qualify
for the exemption.

"A foster child must live with you as a member of your
household for the entire year to qualify as your dependent.
For this test, a foster child is one who is in your care
that you care for as your own child. It does not matter how
the child became a member of the household."

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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My wife and I have been providing foster care for two
children since Jan 15, 2004. From my understanding of the
law, the children must be with us all year.

Will the IRS dispute the 15 days?

Thanks

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