What year is a gift in?

If I give someone a rather sizable gift for Christmas, and they don't cash the check until next year; is the gift this year or next?

Reply to
Troubled
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This year. Assuming the check is not post-dated, they had access to the money this year because they could have cashed the check. It's called constructive receipt.

Bob Sandler

Reply to
Bob Sandler

The gift probably isn't "completed" until you no longer have the ability to "stop payment" on the check and recover the funds. So it would probably be deemed a completed gift in the year that it clears. This is an exception to the general "constructive receipt" doctrine and/or that doctrine isn't relevant to the definition of a "gift".

MTW

Reply to
MTW

MTW is correct. Completed gifts require delivery, intent and acceptance. In order for the gift to an individual to be considered completed, it must be accepted by the individual. Acceptance comes when the donee takes the cash out of your hand or deposits a check you gave him/her. This differs from a check written to a charity and posted on 12/31. Tax law treats that as having been accepted by the charity as long as the charity is known to accept checks as gifts.

Reply to
Alan

Alan wrote: : On 12/23/14 2:22 PM, MTW wrote: : > On Tuesday, December 23, 2014 10:05:03 AM UTC-8, Troubled wrote: : >> If I give someone a rather sizable gift for Christmas, and they don't cash : >> the check until next year; is the gift this year or next? : > : > The gift probably isn't "completed" until you no longer have the ability to "stop payment" on the check and recover the funds. So it would probably be deemed a completed gift in the year that it clears. This is an exception to the general "constructive receipt" doctrine and/or that doctrine isn't relevant to the definition of a "gift". : > : > MTW : > : MTW is correct. Completed gifts require delivery, intent and acceptance. : In order for the gift to an individual to be considered completed, it : must be accepted by the individual. Acceptance comes when the donee : takes the cash out of your hand or deposits a check you gave him/her. : This differs from a check written to a charity and posted on 12/31. Tax : law treats that as having been accepted by the charity as long as the : charity is known to accept checks as gifts.

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I have just transferred some cash from my brokerage account to my kids for a gift for 2014. do they have to do anything to prove it is a gift this year?

Wendy

Reply to
W. Baker

Anyone is free to reject a gift. If you hand your son a $20 bill and he puts it in his pocket or he says thanks dad, he has accepted the gift. If you transfer $14000 in cash from your account to his account then YES something else has to happen in order for the gift to be accepted. He would need to be made aware that you gave him a gift of $14000 and he would have to acknowledge it.

Reply to
Alan

Anyone is free to reject a gift. If you hand your son a $20 bill and he puts it in his pocket or he says thanks dad, he has accepted the gift. If you transfer $14000 in cash from your account to his account then YES something else has to happen in order for the gift to be accepted. He would need to be made aware that you gave him a gift of $14000 and he would have to acknowledge it. ============= Careful: If one were to use the above standard in all cases, then children age 4 and under will never receive gifts because they're too young to understand the concept of money. ;-)

Instead, I would apply the normal rules for end-year transaction clearing: If it clears in the same time frame as that normally used for business (i.e. within the first 75 days of the calendar year), then you're probably good to assume that it was accepted with issued, not when actually drawn.

Reply to
D. Stussy

I merely pointed out that to have a completed gift it must be accepted. I never said that the date of the gift is tied to the acceptance. The date is typically the date that the donor gives up title or control of the money unless the donee rejects the gift.

Reply to
Alan

Alan wrote: : On 1/24/2015 1:53 AM, D. Stussy wrote: : >> : > Anyone is free to reject a gift. If you hand your son a $20 bill and he : > puts it in his pocket or he says thanks dad, he has accepted the gift. : > If you transfer $14000 in cash from your account to his account then YES : > something else has to happen in order for the gift to be accepted. He : > would need to be made aware that you gave him a gift of $14000 and he : > would have to acknowledge it. : > =============: > : > Careful: If one were to use the above standard in all cases, then : > children age 4 and under will never receive gifts because they're too : > young to understand the concept of money. ;-) : > : > Instead, I would apply the normal rules for end-year transaction : > clearing: If it clears in the same time frame as that normally used for : > business (i.e. within the first 75 days of the calendar year), then : > you're probably good to assume that it was accepted with issued, not : > when actually drawn. : I merely pointed out that to have a completed gift it must be accepted. : I never said that the date of the gift is tied to the acceptance. The : date is typically the date that the donor gives up title or control of : the money unless the donee rejects the gift.

thank you both!

Wendy

Reply to
W. Baker

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