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Posted December 1st, 2016

Let’s Review the Date-of-Gift Rules: Part 2

Credit Cards on Bank Statements

Read part one here.

Let’s continue, beginning with credit card gifts. Charities typically don’t know the date of gift for a gift via credit card. Why? Because the date of gift is the date the charge is posted to the donor’s account as shown on the credit card statement. This is the date the donor borrows money to give to charity.

Next, “gifts in kind.” What is a gift in kind? I don’t know; the term has no formal IRS definition. Let’s assume it means gifts of tangible personal property. The law here is a mixed bag. The decided cases mostly require actual physical delivery, or a tender (offer) of physical delivery, to the charitable donee. A deed of gift, all by itself, is generally no substitute for delivery (or tender of delivery) from donor to charity.

What about charitable remainder trusts (CRTs)? The law here appears to be clear; namely, that the date of gift is the date the donated asset comes into the possession or other control of the trustee.

Now for a tricky one, gift annuities. Given that gift annuities are contractual arrangements and that the donee organization is in control of the contract terms, this one shouldn’t be tricky. Yet many charities make it tricky in the case of a gift annuity funded with a check that is mailed by treating the date of gift as the postmark date. It’s far better, clearer and simpler in my view to treat the gift annuity as being established on the date the charity receives the check. Same in my view for stock-funded gift annuities.

It’s the busiest time of the year for fundraisers. We hope these tips help. Good luck with year-end gifts!

For more information, see IRS Publication 526.

by Jon Tidd, ESQ

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