Giving A Gift Of Grain

Benefits of Gifting Grain

For farm operators, gifting grain directly, rather than selling the grain and making a gift from the proceeds, may provide a more significant tax savings and help support your favorite charities.

You need to contact the Fort Dodge Community Foundation and let them know your interested in making a gift of grain. The Community Foundation will set up a fund for you in which you can make your charitable donations to your favorite charities and charitable causes. The Community Foundation will need to know how many bushels of grain you are donating and the elevator or co-op that you will be using. The Community Foundation will then set up an agreement with the elevator for this transaction.

As a farm operator, you simply deliver the grain to your local elevator or co-op, tell them you would like to transfer ownership to the Community Foundation. The Foundation will work directly with the elevator or co-op to arrange an immediate sale and the value of the grain will benefit the charities and community of your choice.

Gifting grain to the Community Foundation allows you to avoid the sale of the commodity as income, while the production costs may still be deductible. Reducing taxable income may provide advantages such as minimizing or eliminating self-employment tax and reducing adjusted gross income. 

Important Things to Consider

• Be sure the gift is grain commodities, not a grain storage receipt, which could be considered a cash equivalent. The Fort Dodge Community Foundation must be able to demonstrate “control and dominion” over the gifted property. Therefore, as a donor, you cannot offer the foundation any guidance as to when to sell the commodity.
• There is no recognized income, but the charitable deduction is limited to basis, which is ordinarily zero. Typically, your cost of raising and growing the grain can be deducted as a farm business expense.
• Many grain farmers annually certify or document bushels of production with a Farm Service Agency for the purpose of enrolling that grain production in various agriculture subsidy programs. You should be sure to accomplish the FSA certification before making a gift of grain commodities to any organization.
• Please consult your tax professional for advice applicable to your particular tax situation prior to making a gift of grain commodities