- 29 -
there can be no constructive receipt. Noel v. Commissioner, 50
T.C. 702, 706-707 (1968) (citing Jacobs v. Commissioner, 22
B.T.A. 1166, 1169 (1931) and Gullett v. Commissioner, 31 B.T.A.
1067, 1069 (1935)); see also Basila v. Commissioner, 36 T.C. 111,
115-116 (1961).
Whether the funds were actually available for the taxpayer
to draw on, i.e., whether a check could be cashed, is a question
of fact. Johnson v. Commissioner, 25 T.C. 499, 503 (1955). We
consider all relevant factors. Id.; see also Williams v.
Commissioner, T.C. Memo. 1994-560; Rosenberg v. United States,
295 F. Supp. 820, 823-824 (E.D. Mo. 1969), affd. per curiam 422
F.2d 341 (8th Cir. 1970).
We hold that Mr. Premji did not constructively receive the
$7,088 represented by the October 1, 1990, check because there
were substantial restrictions that would have prevented him from
cashing it. That check was dated the same day that M&L filed its
bankruptcy petition. Hence, M&L's assets became property of the
bankruptcy estate on that day and the automatic stay provided in
11 U.S.C. section 362(a) (1994) would have prevented the bank
from paying that check.
Although 11 U.S.C. section 362(b)(11) (1994) creates an
exception to the automatic stay for presentment of negotiable
instruments, case law interpreting that provision indicates that
the exception does not authorize a transfer of bankruptcy estate
property. Wittman v. State Farm Life Insurance Co. (In re
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