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Post-dated check, mobile deposit & constructive receipt
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Ian Pilcher
Jan 3, 2017, 8:40:03 PM1/3/17
to
One of my tenant's January rent check (due January 1, 2017) arrived on
December 31. I used my bank's mobile app to "deposit" the check and
received a confirmation email that same day.
December 31, 2016, wasn't a business day, so the effective date of the
deposit (per the bank's web site) is January 3, 2017.
Only after I had "deposited" the check did I notice that the tenant had
"post-dated" it to January 1, 2017.
So ... when did I "constructively" receive this income?
--
========================================================================
Ian Pilcher arequ...@gmail.com
-------- "I grew up before Mark Zuckerberg invented friendship" --------
========================================================================
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
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<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
December 31. I used my bank's mobile app to "deposit" the check and
received a confirmation email that same day.
December 31, 2016, wasn't a business day, so the effective date of the
deposit (per the bank's web site) is January 3, 2017.
Only after I had "deposited" the check did I notice that the tenant had
"post-dated" it to January 1, 2017.
So ... when did I "constructively" receive this income?
--
========================================================================
Ian Pilcher arequ...@gmail.com
-------- "I grew up before Mark Zuckerberg invented friendship" --------
========================================================================
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
Arthur Rubin
Jan 4, 2017, 11:35:11 AM1/4/17
to
On Tuesday, January 3, 2017 at 5:40:03 PM UTC-8, Ian Pilcher wrote:
> One of my tenant's January rent check (due January 1, 2017) arrived on
> December 31. I used my bank's mobile app to "deposit" the check and
> received a confirmation email that same day.
>
> December 31, 2016, wasn't a business day, so the effective date of the
> deposit (per the bank's web site) is January 3, 2017.
>
> Only after I had "deposited" the check did I notice that the tenant had
> "post-dated" it to January 1, 2017.
>
> So ... when did I "constructively" receive this income?
The bank credited to you in 2017, and you couldn't have had it credited earlier. Constructive receipt would be 1/3/17 (or possibly 1/2/17, if it were a banking day, even though a Federal holiday.)
> One of my tenant's January rent check (due January 1, 2017) arrived on
> December 31. I used my bank's mobile app to "deposit" the check and
> received a confirmation email that same day.
>
> December 31, 2016, wasn't a business day, so the effective date of the
> deposit (per the bank's web site) is January 3, 2017.
>
> Only after I had "deposited" the check did I notice that the tenant had
> "post-dated" it to January 1, 2017.
>
> So ... when did I "constructively" receive this income?
--
Arthur L. Rubin, AFSP, CRTP, Brea, CA
MTW
Jan 4, 2017, 12:20:26 PM1/4/17
to
On Tuesday, January 3, 2017 at 5:40:03 PM UTC-8, Ian Pilcher wrote:
> One of my tenant's January rent check (due January 1, 2017) arrived on
> December 31. I used my bank's mobile app to "deposit" the check and
> received a confirmation email that same day.
>
> December 31, 2016, wasn't a business day, so the effective date of the
> deposit (per the bank's web site) is January 3, 2017.
>
> Only after I had "deposited" the check did I notice that the tenant had
> "post-dated" it to January 1, 2017.
>
> So ... when did I "constructively" receive this income?
If you received and deposited the check in 2016, AND the bank clears the item in the ordinary course of business (ie: it doesn't hiccup because the check was postdated), then I'd guess you have receipt in 2016.
> December 31. I used my bank's mobile app to "deposit" the check and
> received a confirmation email that same day.
>
> December 31, 2016, wasn't a business day, so the effective date of the
> deposit (per the bank's web site) is January 3, 2017.
>
> Only after I had "deposited" the check did I notice that the tenant had
> "post-dated" it to January 1, 2017.
>
> So ... when did I "constructively" receive this income?
MTW
Ian Pilcher
Jan 5, 2017, 2:47:48 PM1/5/17
to
On 01/04/2017 10:32 AM, Arthur Rubin wrote:
> The bank credited to you in 2017, and you couldn't have had it
> credited earlier. Constructive receipt would be 1/3/17 (or possibly
> 1/2/17, if it were a banking day, even though a Federal holiday.)
> The bank credited to you in 2017, and you couldn't have had it
> credited earlier. Constructive receipt would be 1/3/17 (or possibly
> 1/2/17, if it were a banking day, even though a Federal holiday.)
On 01/04/2017 11:17 AM, MTW wrote:
> If you received and deposited the check in 2016, AND the bank clears
> the item in the ordinary course of business (ie: it doesn't hiccup
> because the check was postdated), then I'd guess you have receipt in
> 2016.
Anyone want to break the tie? ;-)
> If you received and deposited the check in 2016, AND the bank clears
> the item in the ordinary course of business (ie: it doesn't hiccup
> because the check was postdated), then I'd guess you have receipt in
> 2016.
Actually, I've become reasonably certain that it is 2016 income.
First, I don't think that the date on the check is relevant to this
issue. Apparently it isn't that uncommon for banks to accept post-dated
checks "early".
http://www.consumerfinance.gov/askcfpb/967/can-bank-or-credit-union-cash-post-dated-check-date-check.html
This is confirmed by my wife, who works as a branch banker/teller at a
major U.S. retail bank.
So the remaining issue is the fact that December 31 was a holiday.
Assuming that the comment about Kahler v Commissioner in this post are
correct, that seems pretty definitive.
https://www.accountantforums.com/threads/constructive-receipt.44423/page-3#post-214851
Taxed and Spent
Jan 5, 2017, 11:37:35 PM1/5/17
to
On 1/5/2017 11:46 AM, Ian Pilcher wrote:
> On 01/04/2017 10:32 AM, Arthur Rubin wrote:
>> The bank credited to you in 2017, and you couldn't have had it
>> credited earlier. Constructive receipt would be 1/3/17 (or possibly
>> 1/2/17, if it were a banking day, even though a Federal holiday.)
>
> On 01/04/2017 11:17 AM, MTW wrote:
>> If you received and deposited the check in 2016, AND the bank clears
>> the item in the ordinary course of business (ie: it doesn't hiccup
>> because the check was postdated), then I'd guess you have receipt in
>> 2016.
>
> Anyone want to break the tie? ;-)
>
> Actually, I've become reasonably certain that it is 2016 income.
>
> First, I don't think that the date on the check is relevant to this
> issue. Apparently it isn't that uncommon for banks to accept post-dated
> checks "early".
>
>
> http://www.consumerfinance.gov/askcfpb/967/can-bank-or-credit-union-cash-post-dated-check-date-check.html
>
>
> This is confirmed by my wife, who works as a branch banker/teller at a
> major U.S. retail bank.
>
> So the remaining issue is the fact that December 31 was a holiday.
> Assuming that the comment about Kahler v Commissioner in this post are
> correct, that seems pretty definitive.
>
>
> https://www.accountantforums.com/threads/constructive-receipt.44423/page-3#post-214851
>
>
I have not been able to deposit a rent check dated the first when the
> On 01/04/2017 10:32 AM, Arthur Rubin wrote:
>> The bank credited to you in 2017, and you couldn't have had it
>> credited earlier. Constructive receipt would be 1/3/17 (or possibly
>> 1/2/17, if it were a banking day, even though a Federal holiday.)
>
> On 01/04/2017 11:17 AM, MTW wrote:
>> If you received and deposited the check in 2016, AND the bank clears
>> the item in the ordinary course of business (ie: it doesn't hiccup
>> because the check was postdated), then I'd guess you have receipt in
>> 2016.
>
> Anyone want to break the tie? ;-)
>
> Actually, I've become reasonably certain that it is 2016 income.
>
> First, I don't think that the date on the check is relevant to this
> issue. Apparently it isn't that uncommon for banks to accept post-dated
> checks "early".
>
>
> http://www.consumerfinance.gov/askcfpb/967/can-bank-or-credit-union-cash-post-dated-check-date-check.html
>
>
> This is confirmed by my wife, who works as a branch banker/teller at a
> major U.S. retail bank.
>
> So the remaining issue is the fact that December 31 was a holiday.
> Assuming that the comment about Kahler v Commissioner in this post are
> correct, that seems pretty definitive.
>
>
> https://www.accountantforums.com/threads/constructive-receipt.44423/page-3#post-214851
>
>
tenant handed it to me on the 31st, even AFTER I pointed out the
relevant law to my financial institution. So, I push you back into the tie.
I would break the tie this way: which does taxpayer prefer?
Stuart O. Bronstein
Jan 5, 2017, 11:52:40 PM1/5/17
to
Taxed and Spent <nospam...@nonospam.com> wrote:
>> First, I don't think that the date on the check is relevant to
>> this issue. Apparently it isn't that uncommon for banks to
>> accept post-dated checks "early".
Yes, I certainly agree with that. The date written on the check has
no legal effect from the standpoint of when the payment is received.
>> This is confirmed by my wife, who works as a branch banker/teller
>> at a major U.S. retail bank.
Not all banks will do that. But with ATM machinese these days,
deposits can be made at any time of the day or night, and the date on
the check is not examined by the ATM machine - at least not in my
experience.
>> So the remaining issue is the fact that December 31 was a
>> holiday. Assuming that the comment about Kahler v Commissioner in
>> this post are correct, that seems pretty definitive.
In the old days before ATMs became so ubiquitous the rule was that if
you received the check after you could practically have cashed it at
the end of the year, it would not be recognized until the following
year. I would imagine the same rule would apply now, since ATM
deposits are conditional until the following business day, and ATM
withdrawals after business hours may actually be considered loans
until the next business day.
> I have not been able to deposit a rent check dated the first when
> the tenant handed it to me on the 31st, even AFTER I pointed out
> the relevant law to my financial institution. So, I push you back
> into the tie.
Some banks will go one way, some with go the other. But what the
bank actually does based on the date written on the check is
idiosyncratic, and not likely to influence the say the IRS would see
the deposit.
> I would break the tie this way: which does taxpayer prefer?
I agree with that. It seems to me that this is a close enough call
that the taxpayer could legitimately claim it in either year, unless
it might make a huge difference in his tax. The IRS would generally
always opt for earlier inclusion so that they can get tax on the
transaction sooner.
--
Stu
http://DownToEarthLawyer.com
> Ian Pilcher wrote:
>> Arthur Rubin wrote:
>>> The bank credited to you in 2017, and you couldn't have had it
>>> credited earlier. Constructive receipt would be 1/3/17 (or
>>> possibly 1/2/17, if it were a banking day, even though a Federal
>>> holiday.)
>> Arthur Rubin wrote:
>>> The bank credited to you in 2017, and you couldn't have had it
>>> credited earlier. Constructive receipt would be 1/3/17 (or
>>> possibly 1/2/17, if it were a banking day, even though a Federal
>>> holiday.)
>> MTW wrote:
>>> If you received and deposited the check in 2016, AND the bank
>>> clears the item in the ordinary course of business (ie: it
>>> doesn't hiccup because the check was postdated), then I'd guess
>>> you have receipt in 2016.
>>
>> Anyone want to break the tie? ;-)
>>
>> Actually, I've become reasonably certain that it is 2016 income.
Well, I half agree.
>>> If you received and deposited the check in 2016, AND the bank
>>> clears the item in the ordinary course of business (ie: it
>>> doesn't hiccup because the check was postdated), then I'd guess
>>> you have receipt in 2016.
>>
>> Anyone want to break the tie? ;-)
>>
>> Actually, I've become reasonably certain that it is 2016 income.
>> First, I don't think that the date on the check is relevant to
>> this issue. Apparently it isn't that uncommon for banks to
>> accept post-dated checks "early".
no legal effect from the standpoint of when the payment is received.
>> This is confirmed by my wife, who works as a branch banker/teller
>> at a major U.S. retail bank.
deposits can be made at any time of the day or night, and the date on
the check is not examined by the ATM machine - at least not in my
experience.
>> So the remaining issue is the fact that December 31 was a
>> holiday. Assuming that the comment about Kahler v Commissioner in
>> this post are correct, that seems pretty definitive.
you received the check after you could practically have cashed it at
the end of the year, it would not be recognized until the following
year. I would imagine the same rule would apply now, since ATM
deposits are conditional until the following business day, and ATM
withdrawals after business hours may actually be considered loans
until the next business day.
> I have not been able to deposit a rent check dated the first when
> the tenant handed it to me on the 31st, even AFTER I pointed out
> the relevant law to my financial institution. So, I push you back
> into the tie.
bank actually does based on the date written on the check is
idiosyncratic, and not likely to influence the say the IRS would see
the deposit.
> I would break the tie this way: which does taxpayer prefer?
that the taxpayer could legitimately claim it in either year, unless
it might make a huge difference in his tax. The IRS would generally
always opt for earlier inclusion so that they can get tax on the
transaction sooner.
--
Stu
http://DownToEarthLawyer.com
Arthur Rubin
Jan 6, 2017, 2:42:18 PM1/6/17
to
On Thursday, January 5, 2017 at 11:47:48 AM UTC-8, Ian Pilcher wrote:
> On 01/04/2017 10:32 AM, Arthur Rubin wrote:
> > The bank credited to you in 2017, and you couldn't have had it
> > credited earlier. Constructive receipt would be 1/3/17 (or possibly
> > 1/2/17, if it were a banking day, even though a Federal holiday.)
>
> On 01/04/2017 11:17 AM, MTW wrote:
> > If you received and deposited the check in 2016, AND the bank clears
> > the item in the ordinary course of business (ie: it doesn't hiccup
> > because the check was postdated), then I'd guess you have receipt in
> > 2016.
>
> Anyone want to break the tie? ;-)
>
> Actually, I've become reasonably certain that it is 2016 income.
>
> First, I don't think that the date on the check is relevant to this
> issue. Apparently it isn't that uncommon for banks to accept post-dated
> checks "early".
>
>
> http://www.consumerfinance.gov/askcfpb/967/can-bank-or-credit-union-cash-post-dated-check-date-check.html
>
> This is confirmed by my wife, who works as a branch banker/teller at a
> major U.S. retail bank.
>
> So the remaining issue is the fact that December 31 was a holiday.
> Assuming that the comment about Kahler v Commissioner in this post are
> correct, that seems pretty definitive.
If Kahler is still good law, it seems pretty clear that it's 2016 income; the decision seems to indicate that you have (then 1952) income if you could have sold (not cashed) the check before the end of the year. I haven't Shepardized Kahler lately (meaning, I'm not going to pay my service to check it for someone other than an actual client), so I'll withdraw might comment.
> On 01/04/2017 10:32 AM, Arthur Rubin wrote:
> > The bank credited to you in 2017, and you couldn't have had it
> > credited earlier. Constructive receipt would be 1/3/17 (or possibly
> > 1/2/17, if it were a banking day, even though a Federal holiday.)
>
> On 01/04/2017 11:17 AM, MTW wrote:
> > If you received and deposited the check in 2016, AND the bank clears
> > the item in the ordinary course of business (ie: it doesn't hiccup
> > because the check was postdated), then I'd guess you have receipt in
> > 2016.
>
> Anyone want to break the tie? ;-)
>
> Actually, I've become reasonably certain that it is 2016 income.
>
> First, I don't think that the date on the check is relevant to this
> issue. Apparently it isn't that uncommon for banks to accept post-dated
> checks "early".
>
>
> http://www.consumerfinance.gov/askcfpb/967/can-bank-or-credit-union-cash-post-dated-check-date-check.html
>
> This is confirmed by my wife, who works as a branch banker/teller at a
> major U.S. retail bank.
>
> So the remaining issue is the fact that December 31 was a holiday.
> Assuming that the comment about Kahler v Commissioner in this post are
> correct, that seems pretty definitive.
--
Arthur Rubin, AFSP, CRTP, Brea, CA
Arthur Rubin
Jan 6, 2017, 2:42:18 PM1/6/17
to
On Thursday, January 5, 2017 at 8:37:35 PM UTC-8, Taxed and Spent wrote:
> On 1/5/2017 11:46 AM, Ian Pilcher wrote:
> > On 01/04/2017 10:32 AM, Arthur Rubin wrote:
> >> The bank credited to you in 2017, and you couldn't have had it
> >> credited earlier. Constructive receipt would be 1/3/17 (or possibly
> >> 1/2/17, if it were a banking day, even though a Federal holiday.)
> >
> > On 01/04/2017 11:17 AM, MTW wrote:
> >> If you received and deposited the check in 2016, AND the bank clears
> >> the item in the ordinary course of business (ie: it doesn't hiccup
> >> because the check was postdated), then I'd guess you have receipt in
> >> 2016.
> >
> > Anyone want to break the tie? ;-)
> >
> > Actually, I've become reasonably certain that it is 2016 income.
> >
> > First, I don't think that the date on the check is relevant to this
> > issue. Apparently it isn't that uncommon for banks to accept post-dated
> > checks "early
> On 1/5/2017 11:46 AM, Ian Pilcher wrote:
> > On 01/04/2017 10:32 AM, Arthur Rubin wrote:
> >> The bank credited to you in 2017, and you couldn't have had it
> >> credited earlier. Constructive receipt would be 1/3/17 (or possibly
> >> 1/2/17, if it were a banking day, even though a Federal holiday.)
> >
> > On 01/04/2017 11:17 AM, MTW wrote:
> >> If you received and deposited the check in 2016, AND the bank clears
> >> the item in the ordinary course of business (ie: it doesn't hiccup
> >> because the check was postdated), then I'd guess you have receipt in
> >> 2016.
> >
> > Anyone want to break the tie? ;-)
> >
> > Actually, I've become reasonably certain that it is 2016 income.
> >
> > First, I don't think that the date on the check is relevant to this
> > issue. Apparently it isn't that uncommon for banks to accept post-dated
> > checks "early
Ian Pilcher
Jan 6, 2017, 2:52:29 PM1/6/17
to
On 01/05/2017 10:32 PM, Taxed and Spent wrote:
> I would break the tie this way: which does taxpayer prefer?
Funny that.
> I would break the tie this way: which does taxpayer prefer?
Our largest rental property was vacant for several months this year, so
we're going to have a disallowed passive activity loss either way.
If we recognize the income in 2016, the disallowed loss that gets
carried forward to 2017 will be smaller, but 2017 income will be smaller
by an equal amount.
So the taxpayer doesn't really have any preference.
--
========================================================================
Ian Pilcher arequ...@gmail.com
-------- "I grew up before Mark Zuckerberg invented friendship" --------
========================================================================
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