What year is a gift in?

Discussion in 'Tax' started by Troubled, Dec 23, 2014.

  1. Troubled

    Troubled Guest

    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?
     
    Troubled, Dec 23, 2014
    #1
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  2. Troubled

    Bob Sandler Guest

    If I give someone a rather sizable gift for Christmas, and they
    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
     
    Bob Sandler, Dec 23, 2014
    #2
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  3. Troubled

    MTW Guest

    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, Dec 23, 2014
    #3
  4. Troubled

    Alan Guest

    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.
     
    Alan, Dec 24, 2014
    #4
  5. Troubled

    W. Baker Guest

    : 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.

    : --
    : Alan
    : http://taxtopics.net

    : --

    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
     
    W. Baker, Dec 24, 2014
    #5
  6. Troubled

    Alan Guest

    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.
     
    Alan, Dec 26, 2014
    #6
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