when to claim gift expense

[Catherine]

Hi all --

I have a client who donated goods to a school in late 2010. She _thought_ she was buying supplies for which she was going to receive reimbursement -- but in early 2011 instead received a "thank you for your donation" letter from the school.

Do we have to amend 2010 (when the goods were given) -- or claim in 2011, when she learned that she would not be reimbursed?

TIA,

Catherine

[kcjenkins]

I'd say the 'donation' was in 2011, since a gift has an element of 'intent', and she did not intend the gift in 2010, but in 2011, when she decided not to argue about the letter.

[jainen]

>>she was going to receive reimbursement<<

In legal terms, this sounds like theft or embezzlement by the school since she did not intend to make a gift. Pub 526 has an example of a conditional donation to build a school gym. That's a different situation, but taken out of context it seems to support the later date.by saying, "You cannot deduct your gift as a charitable contribution until there is no chance of a refund."

Pub 526 also says, "Usually, you make a contribution at the time of its unconditional delivery," but when it could go either way IRS naturally seems more comfortable with delayed deductions (unless obviously for tax purposes). Did she happen to be a school employee or contractor?

[Lion EA]

Does the letter include the 2010 date as the date of the gift in the opinion of the school? Or, does the letter have only 2011 dates?

[Catherine]

I am unsure as to the date of the letter from the school and will enquire of my client.

Thanks for all opinions!