Date-Of-Delivery Rules

If you plan to make charitable donations before the end of the year, make sure you understand how “date-of-delivery” rules work. 

Over the next two weeks, donors will be able to claim gifts as deductions for their tax returns for 2014.  In order to qualify for these deductions, donors must comply with the IRS rules involving when the gift was contributed to the charity.  These rules vary, depending on the kind of property that is gifted and how it is transmitted. 

A gift’s date of delivery establishes the tax year in which the gift can be deducted; the value of the donation for assets that might fluctuate in value; and whether a gift is considered to be long-term or short-term property.  “Depending on the fund, it can take several weeks to effect the transfer.  For that reason, mutual-fund gifts should be planned well in advance.”

If you are making a gift by check, the date you mail the check is normally considered the date of delivery.  For instance, a check mailed on December 31 will qualify for a deduction on a person’s 2014 tax return, even if the charity does not receive the check until January.  Be aware, though, that this rule applies to U.S. postal mail and not to private couriers. 

Since date-of-delivery rules could have a big effect on your tax returns for 2014, fi you plan to give to charity, give quickly.

See Glenn Ruffenach, Year-End Charitable Giving: Get the Tax Timing Right, Market Watch, Dec. 15, 2014. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.