Many nonprofit supporters make gifts in December. These gifts often may be larger and are an excellent way to benefit a nonprofit. It is important to understand how to make a gift of cash or property and qualify for a deduction this year.
The basic rule is that a gift to a nonprofit is deductible when the property or cash is delivered to a charity. The delivery rules are dependent on the type of property gifted and the timing of the transfer. The delivery is usually complete when the nonprofit receives the property.
There are several rules, however, that apply to gifts of cash, checks or property.
1. Gift of Cash — Cash is deductible when it is transferred to the nonprofit. A gift of cash is different from making a pledge or signing a note to make a gift in the future. With a pledge or note, there is no deduction until there is an actual transfer of cash to charity.
2. Gift by Check — Checks are usually deductible when placed in the mail, even though the final transfers occur when the checks clear the banking institution. For example, if you use the U.S. Mail to send a check by December 31, the gift is completed on the date of the postmark. As long as the check...