Got Grain? 3 Tips for Making Charitable Gifts of Grain

Corn fields outside of Monrovia, Indiana. Photo Credit: Danie M. Becknell

The harvest is coming, and there is a way to not only benefit your local community by donating a portion of your crop, but also to receive valuable tax-saving benefits. As the Communications Officer for the Community Foundation of Morgan County (CFMC) I have seen the impact charitable donations make on our community. Your gift allows you to make a lasting difference in the lives of your friends and neighbors through the CFMC's Impact Grants program, scholarships, or a donor advised fund -- The options are limitless, and it's all up to you.* What has prompted me to share this with you besides the growth of our summer crops? I am currently enrolled in one of Northwestern University's social marketing courses through Coursera, and I can't think of a better way to test these new skills than working with our local farmers.

"Four Facts About Gifting Grain"
Rebecca Longcrow, an attorney with Thompson Law, Sioux Falls, S.D. listed in her article for Indiana Prairie Farmer in October, 2015 a variety of institutions, like community foundations, that will accept gifts of grain. The benefit of donating to the Community Foundation of Morgan County is that you have several options, all of which are determined by your specific charitable goals. 

"Gift of Grain Can Aid Charity, Farm"
In the winter of 2013, Erin Herbold-Swalwell, an attorney with Beving, Swanson & Forrest in Des Moines, Iowa addressed this subject in Wallaces Farmer magazine. Herbold-Swalwell lists several options, such as grain gifting programs that can offer significant tax savings opportunities to farmers. When farmer donate raised grain, they reduce their total income by avoiding the sale of the grain, additionally the costs associated with producing the grain may still be deductible. Consequently, by gifting grain, a farmer may be able to reduce self-employment tax liability because the grain was never sold, which reduces the amount of adjusted gross income for the tax year.

"Gifting Strategy Saves Tax"
We learn in an article in the December, 2010 edition of The Farmer from Robert Anderson, a farm financial management consultant in Redwood Falls, Minnesota that it is possible to gift grains to family members. BUT, that loved one will then need to pay tax on the grain, because the farmer has already deducted it from their expenses before filing their annual tax return. If this grain were gifted to the charity of their choice they would avoid both income tax and self-employment tax on the gifts.

Image Courtesy of Green Mountain Girls Farm.

3 Grain Gifting Incentives

  1. It's Your Choice: When you donate raised grain to the Community Foundation of Morgan County you have several charitable options, all of which are determined by your specific charitable goals.
  2. Save Big Money: When you donate raised grain, you reduce your total income by avoiding the sale of the grain, retain tax-deductible costs associated with producing the grain, thus reducing both self-employment tax and the amount of adjusted gross income for the tax year.
  3. Avoid Gift Tax: While it is possible to gift grain to family members, they will be responsible for taxes associated with the gift. 

1 Last Tip

When making a charitable gift of grain, a farmer delivers the grain to the elevator and does not place their name on the donated portion of the scale ticket. This ensures that the donation is not counted as a portion of the farmer's income. Don Villwock, Past President of Indiana Farm Bureau stated, "I deliver gain to my local elevator and may designate all or a percentage of the bushels of that truck or wagon load to Knox County Community Foundation." He continued, "I notify my local foundation director there is grain scale ticket at the elevator and that they should contact them [...] to sell the grain and pick up the check, or tell them where to mail the check.  The IRS does not want a farmer to control the sale."

There are numerous ways a Gift of Grain can benefit you financially. As you prepare to file taxes ask a tax professional about a Gift of Grain, and how it may leverage you greater tax savings this year, while supporting a cause that is close to your heart. For more information on how the Community Foundation of Morgan County can make your charitable goals a reality please contact Chris Oganowski at (765) 813-0003. 
*Legal restrictions may apply state-to-state, so please consult with an experienced tax adviser before proceeding.

Danie M. Becknell


Find me online at: Facebook | Twitter | Instagram | LinkedIn 
Originally haling from rural Missouri, I have been the Communications Officer for the CFMC for nearly 4 years now. I am currently taking a variety of online marketing courses through Coursera and FutureLearn, so I can better tell our community's story. Previously, I worked as an AmeriCorps VISTA at Gateway Greening in St. Louis, an organization that manages more than 200 community gardens and an urban farm. You could say soil runs in my blood, as my daddy has recently retired from the Missouri Department of Natural Resources and my sister is working on a PhD in Ecology. While working with our community members Morgan County has become home. I have been welcomed into the heart of this community, and I am continually blessed by those I meet and come to call friends. As I sat at my great grandmother's farm table sipping coffee this morning, I reflected on how proud I am to call this generous county home. 

Find the CFMC online at: Facebook | Twitter | YouTube | LinkedIn 

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