I believe that language applies in the unlikely event of an accrual basis taxpayer. The IRS, in Tax Topic 607 describes it as follows:
"A domestic adoption is the adoption of a U.S. child (an eligible child who is a citizen or resident of the U.S. or its possessions before the adoption effort begins). Qualified adoption expenses paid before the year the adoption becomes final are allowable as a credit for the tax year following the year of payment (even if the adoption is never finalized and even if an eligible child was never identified). " Note there is no reference to accrued or incurred.
<a rel="nofollow" target="_blank" href="
https://www.irs.gov/taxtopics/tc607.html">https://www.irs.gov/taxtopics/tc607.html</a> . Tax Topic 607 leaves out any reference to incurred.
