Eligible Adoption Expense
A taxpayer incurs unsuccessful expenses to adopt a child from Country A, but then incurs expense to successfully adopt a child from Country B or, after incurring expenses in Country 1 then 2, is ultimately successful in Country 1. Do these expenses qualify? CRA responded:
[E]ligible adoption expenses include only expenses incurred that relate to an adopted child.
Thus, in Scenario 1, only the expenses the taxpayer incurred to adopt the child in Country B could, subject to the conditions in section 118.01, qualify as eligible adoption expenses for the purposes of the adoption expense tax credit. Expenses incurred related to the adoption of a child from Country A are not eligible … .
As for Scenario 2, the expenses incurred for the adoption of a child from Country 1 could qualify as eligible adoption expenses … provided that these steps lead to adoption of a child for whom the expenses were incurred … .
Foley v. The Queen, 2021 TCC 92 (Informal Procedure)
The taxpayer unsuccessfully claimed that the exclusion from the scope of the adoption tax credit (“AETC”) under s. 118.01 of various expenses he incurred in connection with having a surrogate mother bearing a child derived from an embryo from him and his wife infringed his equality rights under s. 15 of the Charter. Hogan J stated inter alia that “limiting the AETC to adoption-related expenses does not perpetuate or exacerbate any preexisting disadvantage or prejudice within the meaning of section 15” (para. 22).
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|Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Subsection 15(1)||limiting the AETC to adoption-related expenses does not perpetuate or exacerbate any preexisting disadvantage or prejudice||381|