We know that there will be a lot of large one-time gifts made in the next three weeks. However, there will also be many smaller gifts that are under the $13,000 annual exclusion amount.
Care must be made with these gifts at year-end to ensure that they are 2012 gifts, not 2013 gifts. Make sure that the donee deposits the check into their account before year-end, or deliver a certified check to them before year-end.
If you are transferring stocks, bonds or other financial instruments, make sure to get your instructions and documents into the appropriate agency in plenty of time for them to place the transfer on their books before year-end.
With regards to making checks for deductible expense items, mail your checks before year-end. Even if the check clears in 2013, it will still be a 2012 expense item.
For transactions made with a bank credit card (such as VISA or Mastercard), these items will count as an expense when posted to the account even if you pay the balance off in 2013. For retail store credit cards, you are allowed to deduct these when paid, not when the charge is posted to the account.
Paul Neiffer, CPACategories: Farm Industry Trends, Farm Operations, Farm Taxes
Tags: expenses, gifts, year-end