What is your experience with uncashed checks?
I don't know whether the law is the same in every state, but in Tennessee there are escheat laws that force the maker to turn a record of uncashed checks over to the state. I believe the state then posts the information on their "Unclaimed Property" websites.
There are two tax implications with this:
I don't know whether the law is the same in every state, but in Tennessee there are escheat laws that force the maker to turn a record of uncashed checks over to the state. I believe the state then posts the information on their "Unclaimed Property" websites.
There are two tax implications with this:
- What happens if the maker is our client and he (she) is not willing to do this? If the bank balance increases as a result, is this reportable and taxable as "other income?"
- if the maker complies with the law, the bank balance on the balance sheet does increase, but is there an offsetting expense, and is the expense deductible?