Harlan Lunsford wrote:
- quote -

If you deliver it, it doesn't have the advantage of the
timely mailing rule (which sometimes is extended to more
than just the filing of tax returns)....

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Ira Smilovitz wrote:
- quote -

Not really. If I make out a check to the Salvation Army on
December 31st, but don't deliver it (in person versus US
Mail) to them until January 2nd, there's no way this can be
a legitimate prior year's deduction.

ChEAr$,
Harlan Lunsford, EA n LA
Sun Jun 4, 2006

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"Harlan Lunsford" <hlunsford[at]BELLSOUTH.NET> wrote:
- quote -

Charitable contributions follow the date on the check. Gifts
to people follow the date the check is cashed.

Ira Smilovitz

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joeu2004[at]hotmail.com wrote:

- quote -

Are we seeing the same thing even? Here is what I just
read on that web page:

"If you donate cash to a charitable organization, you can
deduct your donation in 2005 as long as you mail your check
by December 31."

So you thought right.

ChEAr$,
Harlan Lunsford, EA n LA

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joeu2004[at]hotmail.com wrote:

- quote -

There's usually a closer relationship between a gift giver
and recipient than there is between a charitable donor and
the organization. This close relationship often allows you
some measure of control over when the check is cashed -- if
a relative asks you not to cash a check until next week
(because they need to receive their paycheck to cover the
amount), you'd have to be a real ingrate not to honor the
request.

But you'd have a hard time controlling when a charitable
organization cashes your check, so it makes some sense to
consider the donation made when you send them the check.
If they don't cash it before the end of the year, that's
not your fault.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

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Stuart A. Bronstein wrote:
- quote -

For a noncharitable donee, there are different rules
depending on whether the donor dies before the check clears.

If the donor is still alive when the check clears a gift by
check in 2005 is considered a valid 2005 gift as long as the
check is deposited or presented for payment before the end
of the year. If the actual payment occurs in 2006 or if the
check clears in 2006, the gift is still deemed to have
occurred in 2005. Rev Rul 96-56. In order for this rule to
apply, the check must actually clear and be paid when first
presented to the donor's bank for payment.

If the donor dies before the cleck clears, the gift is
deemed to be not a completed gift, because the donor held
the power to issue a stop payment on the check at the time
of the donor's death. The courts view this as the power to
undo the gift, which nullifies the gift. (If the donor is
still alive at the time the check clears, then the donor did
not exercise this power, so the IRS allows the date of the
gift to relate back to the earlier date). This used to be
the default rule for all gifts by check until the IRS made
the exception for donors still alive described above.

--Chris Ballard

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123go wrote:
- quote -

Ding! Under "Gifts to Children and Grandchildren":
"If your gift is made by personal check, note that the
recipient of your gift has to actually cash the check before
the end of the year for the gift to count for 2005. [....]
If you use a certified check for making your gift, you can
avoid this potential problem."

I am relieved that this is not obvious to some of the
knowledgable practitioners who contribute to this newsgroup.

I did have the donation rule in mind. I see no reason why a
gift should be treated differently, other than an appellate
decision specific to gifts (as someone else noted). I
suspect that if we look closely at the case law, if any, it
involves a gift of a check that was handed to the recipient,
not mailed.

In my (limited) experience, the postmark is "always" the
prima facie date of transfers, even though it is true that
the recipient does not have "control" of the funds then
since the payer could stop payment on the check.

But the same can be said of checks to charities.

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David Woods, EA, ChFC, CLU wrote:
- quote -

I thought that might be the case (no pun intended).
Can you provide a citation? If not, do you recall the
jurisdiction of the appellate decision?

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123go wrote:
- quote -

I posted the essence of this the other day at "the other" user group.
(Dear Moderator: Please forgive me.) The answer is "b) when it is
cashed by the recipient." Citations are:

Rev. Rul. 67-396, 1967-2 CB 351
IRC =A72511 (Transfers in General)
Treasury Regulations =A725.2511-2 (Cessation of donor's dominion and
control)

In essence, the drawer of the check can stop payment at any
time up until the check is cashed; i.e., the drawer still
has dominion and control over the funds and the "gift" is
still a mere promise of a gift. Thus, the gift has yet to
be completed.

(Note that Rev. Rul. 67-396 was clarified by Rev. Rul.
84-25, 1984-1 CB

191. However, the clarification only relates to the
original RR's portion regarding transfers of promissory
notes.)

Donations are a different matter, but the OP was asking
about gifts.

Peter C. Gatto, CPA

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"123go" <rejecto[at]rejcet.ccc> wrote:
- quote -

Interesting point. The courts apparently say that a gift is
not complete until it is beyond the donor's ability to take
it back. Since a check can be stopped before it is cashed,
it's not complete until that time. See Estate of Newman, 111
T.C. 81 (1998).

Even cashiers' checks can be stopped, though most people
don't realize it. A certified check might be safe, but I
understand it's hard to get them from banks these days.
Perhaps a wire transfer would do.

Stu

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"Barry Margolin" <barmar[at]alum.mit.edu> wrote:
- quote -

Keep reading past the part about DONATIONS to the part about GIFTS.

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"David Woods, EA, ChFC, CLU" <dwoods[at]woods-financial.com> wrote:
- quote -

I think that's a different kind of situation. First, the
bank loses the right to cash the check on the decedent's
death. Next, wouldn't the check be included in the estate
based on §2035?

Stu

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"joeu2004[at]hotmail.com" <joeu2004[at]hotmail.com> wrote:

- quote -

There is case law to support B. A check written as a gift
by a taxpayer and not cashed when he died shortly after was
included in the decedents estate as an asset.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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joeu2004[at]hotmail.com wrote:

- quote -

It seems to me that the site agrees with you. It says "If you donate
cash to a charitable organization, you can deduct your donation in 2005
as long as you mail your check by December 31. This is true even if the
organization doesn't cash you check until 2006."

Where did you see otherwise?

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

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joeu2004[at]hotmail.com wrote:

- quote -

I thought A, and your link confirmed it. No contradiction there.
From the site;
"If you donate cash to a charitable organization, you can
deduct your donation in 2005 as long as you mail your
check by December 31."

JOE

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When does a personal check count as a 2005 gift:
(a) when it is "given" (TBD) to the recipient; or
(b) when it is cashed by the recipient?

I thought it was #A, subject to the definition of "given".
But the following web site says #B:
http://www.thebullandbear.com/articl...5-taxtips.html .

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