Question:1099-R Year of Gift Annuity Payment?

Question:1099-R Year of Gift Annuity Payment?

Forum topic posted in Forum on 27 January 2010| 2 comments
audience: | last updated: 27 January 2010
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Joined: 03/19/2007
Points: 30
On an existing gift annuity contract, a distribution was made to the donor for a December 1, 2009 payment via check. The check was lost in the mail, but the donor did not notify us of the missing payment until January 2010. We reissued the payment via direct deposit on January 25. So do we account for this payment on the 2009 1099-R (where it should have been) or the 2010 1099-R (which would give them an extra payment for 2010)? I would really appreciate any IRS reference, as I can't find anything relating to this situation. Thanks!

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Joined: 01/08/2010
Points: 30
Gift Annuity Payment
The check was issued and due in 2009. When the recipient deposits the check would not be relevant to the year you should issue the 1099.
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Joined: 06/08/2006
Points: 30
1099-R Year of Gift Annuity Payment
IRC Section 451 includes rules for the timing of gross income. Cash basis taxpayers must report all income actually or constructively received during the year. See IRC Section 1.451-2(a) for the constructive receipt doctrine. Case law is built on this. The bottom line answer to your question is that due to constructive receipt doctrine you should include that payment in the annuitant's 2009 Form 1099-R. (Do not manually adjust your system to force it onto the 2010 1099.)
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