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Constructive receipt, constructive payment question

The recent "Constructive Receipt" post reminded me that I have a question regarding "constructive payment".

After procrastinating longer than I should have, I found myself sitting in front of my computer on Saturday afternoon, December 31, 2011, making online electronic payments through my bank for 2011 bills. The payments were for things like real estate taxes on rental properties, etc.

I entered and processed all of the electronic payments online through my bank on 12/31/2011. However, I noticed that the "Payment Date" column on my Bill Pay screen all said, "01/01/2012". The "Estimated Delivery Date" varied depending on whether it was an electronic payment or a manual check that was going to be created and mailed to the payee.

When I go online today and I look at my banking account statement, all of the bills that I actually entered and submitted for payment on 12/31/2011 show a transaction date of 01/03/2012.

From a tax perspective, I don't think that it will end up making much

difference to me in the long run whether the payments end up on my 2011 or

2012 returns. But, if it is legal and correct to do so, I would probably want to be able to keep all of those payments as 2011 payments since they were for 2011 bills.

My question is, when I do my 2011 tax returns, are the bills for which I actually entered the electronic payments on 12/31/2011 considered to have been paid in 2011, or are they payments that were made in 2012?

Reply to
JayC
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Sounds as if you are trying to apply the mailbox rule to your own bank's e-payment procedures. Mailbox rule is not applicable.

These are 2012 payments.

Reply to
Arthur Kamlet

When I did this for just a couple items, before the end of 12/31 the bank showed the payments as being "processed", meaning I could no longer stop these payments. I take this to mean the money is grabbed from my account and thus they were 2011 payments. That is what I did.

Note: I only did this for a couple of bills I received at the last minute. I am never as dilatory as you seemed to be.

Reply to
Pico Rico

In addition to the other responses, Saturday is not a business day. Generally, all transactions entered online after the cutoff time on a business day is considered next day transactions. But did you check (on Dec 31) whether the money was deducted from your account? If it was deducted from your account on Dec 31 (and have a printout to prove it), then can one argue that they were 2011 transactions ???

Reply to
NoClue

Thanks Arthur, Pico, and NoClue.

The money wasn't deducted from my bank account on 12/31, and based on what everyone has suggested so far, it looks like these will all be 2012 payments -- and they cannot be considered as 2011 payments. That's okay with me. I was just curious if I had an option to call them 2011 payments, but I guess not.

Reply to
JayC

The funds were still in your account and you had the ability to withdraw the funds out of your account on the next day on which your bank was open. So you still had constructive rceipt.

Interestingly, any expenses you paid by the swipe of a credit card on 12/31/2011 would have been 2011 expenses.

Dick

Reply to
Dick Adams

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