J.M.
BE consistent, that's the main thing. Decide on a punishment for when he "talks back" and stick to it, whether its time out or spanking or taking away toys. If you always react the same way, each and every time, he will learn to predict the consequences and eventually lessen his actions. In our house use all three for different behaviors, along with a "countdown" to 5 as a warning, but my son is 4 yrs and knows which punishment follows which behaviors. When he was 2 yrs he got time out for everything (and spankings for getting out of time out). For him though, taking away toys generally gets and much quicker reaction/correction and anything else. Whatever you choose, just stick with it. Toddlerhood is difficult enough with all the normal changes. Your little boy has even stress than most so just be patient with him. I don't know how he came to need a home but most cases boil down to either bad parents or deceased parents. Both will cause him to have unique challenges. In the 1st case you've got to overcome and undo whatever he may have been through in the past. In both he is in a new and unfamiliar situation and that is scary to such a small guy. You have to be firm with him but always in a way that he knows he is loved and safe in your home. He will test you even more than normal to either make you prove your love for him or to get you leave him. It's the only way he can control his life. You must discipline but make sure he knows its the BEHAVIOR that is bad NOT HIM. Good luck and Bless you for opening your home to a child in need.