Consider the Gift of Grain

CliftonLarsonAllen Principal and FarmCPA Today blogger, Paul Neiffer says that if your family farm business is structured as a C corporation and you are interested in donating money to a charity you might want to consider gifting grain rather than cash.

 

 

Neiffer: “Farmers who operate as a C Corporation and like to donate money to the local charity whether the local school or church — sometimes they have a limit as to how much they can donate and get a deduction. That limit is 10 percent of their gross income when they give cash. One option for our farmers is to give grain. When they give grain to the church, the school or the charity you don’t get a deduction for the grain you donate, but you effectively get a deduction because you aren’t picking up that grain as income. So when you donate grain you actually have an unlimited amount you can give and not be subject to the charity rules. So if you are a C Corporation, and you want to give some extra money to the church, instead of money give them grain because it will have them and help you too.”

 

Neiffer says unlike gifts to children, you can gift grain that was harvested in the current year.  Also, most charities are set up to handle the sale of the grain.  Once it is in their name, it is usually fairly easy to sell to the local elevator or co-op.

 

Farm CPA Today is one of my favorite informative blogs, if you haven’t yet visited it, go to Farm CPA today.com.