Are contributions effective for 2021 or 2022

It’s that time of year again when many people add charitable giving to their busy holiday to-do list. Year-end giving can come with great benefits, of course, and now is a good time to refresh on some highlights, as well as finer points that can get donors in trouble.

A contribution of cash is effective when the donor delivers it to the charity. As a practical matter, charities rarely accept cash, as such; these contributions commonly are made by check or credit card.

A charitable gift by check is effective when the check is delivered or mailed, as long as the check clears in due course. The check is not treated as an incomplete gift, even though a donor theoretically could stop payment at any time until the check is presented for payment.

IRS Publication 526 offers these guidelines for four other types of giving:

  • Text message
    Contributions made by text message are deductible in the year the donor sends the text message if the contribution is charged to the telephone or wireless account.
  • Credit card
    Contributions charged on your bank credit cards are deductible in the year you make the charge.
  • Pay-by-phone account
    Contributions made through a pay-by-phone account are considered delivered on the date the financial institution pays the amount. This date should be shown on the statement the financial institution sends you.
  • Stock certificate
    A properly endorsed stock certificate is considered delivered on the date of mailing or other delivery to the charity or to the charity’s agent. However, if you give a stock certificate to your agent or to the issuing corporation for transfer to the name of the charity, your contribution isn’t delivered until the date the stock
  • Bitcoin
    Cryptocurrencies are an attractive asset to donate because they allow donors to bypass the capital gains tax. Donors would be subject to that tax if they convert the virtual currency into cash before giving it away, which means less money could go to their selected charity.

Many charities are starting to set up mechanisms to accept cryptocurrencies or are using platforms that help them convert them into cash right away.

Accepting cryptocurrency donations
  • Establish an account with a broker.
  • Provide the account number to the donor.
  • Receive the donated asset.
  • Provide instructions to sell the asset and wire the proceeds to your bank.
  • Determine the gift value and acknowledge the gift.

Contact Clergy Financial Resources to help you with the next steps.

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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421-0101 
Fax: (888) 876-5101


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