26 Jul Gifts of Grain
What could one kernel of grain do for Grant County?
Since the Community Foundation was established in 1984, over $16.8 million has been paid back to our community in the form of grants and scholarships! And because of the Community Foundation’s endowment, these grants and scholarships will continue to be awarded each year to worthy causes in our community, forever.
Donors plant the seed by making gifts to the Foundation.
Those gifts are invested; the value grows.
That endowment income awards grants to charitable causes in our community.
Why the Grant County Farmers’ Fund?
Gifts to the Community Foundation’s Grant County Farmers’ Fund are utilized to support programs, equipment, materials, and resources for local nonprofit agencies and our community’s residents. These dollars do more than just purchase needed resources: they bring people together, provide safety, serve those less fortunate, create recreational opportunities, improve aesthetics, and bring life and love to the word “community”.
Donations given locally invest in our community. Your gift of grain will leave a legacy in Grant County that will live on forever!
How does it work?
In order to be IRS compliant, you must transfer the grain to the foundation before the sale. Transferring grain is simple: a dollar amount or number of bushels can be designated at the grain elevator by filling out this Notice from the Producer form and notifying the Community Foundation of your gift. You will receive a letter confirming your charitable contribution to a qualified tax-exempt 501(c)(3). If you find that your elevator or tax preparer is not familiar with the process, give us a call and we will connect with them for you.
A charitable gift of ordinary income property (grain) creates the ability to exclude that portion of income on your tax returns. Below is an example of the possible income reduction from a gift of grain.
|Income||Without Charitable Gift||With Gift of Ordinary Income Property (Grain)|
|Other income from farming||$35,000||$35,000|
|Income from grain sale||$15,000||$0|
*You pay employment, federal income, & state income tax based on adjusted gross income (less typical exemptions, deductions, etc.).
Note: Crops produced for sale in a farming operation are considered “ordinary income property.” The deduction for a gift of ordinary income property to a charitable organization is limited to the lesser of fair market value or cost basis. Typically, the cost basis has already been deducted from income as the cost of producing the crops; thereby commonly the cost basis is zero, making the gift, in effect, non-tax deductible.
A few things to note:
– Donating grain prior to selling provides maximum tax benefits. With the transfer of your grain, you have the potential to receive a tax savings of more than 35% depending upon your financial circumstances. When transferring the sale of grain to the Community Foundation, you remove the sale proceeds from farm income and therefore eliminate federal, state, county, and self-employment taxes.
– If you deliver the grain to the elevator, sell it and order the proceeds sent to the Community Foundation, you will not be eligible for the tax benefits described. The gift must be made before the sale of grain to receive tax benefits.
– As each farmer’s situation is different, you should consult your professional advisor for legal and tax advice on how a gift of grain may apply to your circumstances. Circumstances include, but are not limited to whether you (a) file as a cash basis taxpayer; (b) claim the standard deduction; and (c) lease on a cash share or crop share basis.
**This information should not be construed as providing you with legal or tax advice.