Gifts of Grain Can Be Golden
As harvest season is upon us, farmers’ greatest assets — such as commodities of corn, soybeans and oats — can yield a generous charitable contribution while also producing tax benefits for the farmer. By contributing commodities or crops to a charitable organization, the cash basis farmer avoids having to include the sale of the cash crop as income, which results in savings of self-employment, federal and state income taxes. Crop share landlords are not eligible.
Here are a few guidelines to consider when inviting a farm donor to consider a gift of grain.
- Timing. Prior to harvest, farmers empty their grain bins to make room for the new year’s crop. Gifts of grain to tax-exempt organizations can be donated from the current or previous year’s harvest, as long as it’s unsold crop inventory with no prior sale commitment.
- Delivery. Be sure the gift is farm commodities.
- Retention of control. Farmers may work with their local elevator to transfer the grain to a charitable organization, but the farmer cannot offer any guidance in the transfer agreement as to the retention or sale of the gifted commodity.
- Documentation. A properly executed warehouse receipt in the nonprofit’s name, or a notarized letter of transfer for crops stored on the farm. The original sales invoice should list the nonprofit’s name as seller.
The AMPERAGE fundraising team encourages farmers to consult with their professional finance, tax or legal advisers to determine tax implications prior to making a gift of grain.