Gifts of Grain

And some seed fell on rich soil and produced fruit. It came up and grew and yielded thirty, sixty, and a hundredfold. -Mark 4:8

SHARING YOUR HARVESTmore effectively

Cash basis farmers who harvest their crops in the fall and make their plans for spring planting may often find that making charitable gifts is a great way to do tax planning. As with all charity and tax planning, one should consult his/her financial and legal advisers—this guidance is not meant to replace one’s advisers who know your entire financial picture. However, the examples offered below show that, for many farmers, at least considering a gift of grain might be the most effective way to “share your harvest.”

The reasons such a gift might be advantageous are several, but the primary are:

  • Avoidance of income to the extent of the value of the contributed grain
  • Deduction of production costs of the grain from the past growing season
  • In many cases, avoidance of the self-employment tax attributed to the contributed grain
  • Effective reduction of adjusted gross income, helping reduce the basis on which tax is assessed, and allowing larger giving not limited to 50% of adjusted gross income

PROCEDURE in the Diocese of Kansas City-St. Joseph

To accomplish a gift of grain, be sure to contact our office at (816)714-2363 or (816)714-2359. We can provide the necessary forms and information by which your grain elevator may transfer ownership to the diocese, your parish, school or another ministry directly prior to sale, thereby ensuring the favorable tax treatment desired by such a gift.

When the portion of grain that one wishes to donate is delivered to the elevator, give our contact information, so that we can take responsibility for the ultimate sale of the grain on the market. Upon transfer of grain for the benefit of the Diocese or one’s favorite ministry, parish or school, the Diocese receives and owns the grain for only a very short time and then sells it for as high a price as possible.

SPECIFIC ADVANTAGES to the Cash Basis Farmer

Sell Grain and Donate Cash to Charity    Donate Grain in Year of Production

Value of Crop $  15,000 $  15,000
Production Cost $    5,000 $    5,000
Net Profit $10,000 $10,000
LessSelf-Employment Tax  

$    1,530

 

Fed’l Inc. Tax $    2,500
State Inc. Tax $       600        –      
Net to Charity $ 5,370 $10,000 (Sale without Deductions)


W
e have developed a “Deed of Gift” Form to accomplish a Gift of Grain. Please contact us at the numbers included above or on the Deed of Gift form: Gifts of Grain-Procedure and Deed of Gift Form

 

Instructions to Donor and Receiving Elevator:

  1. Donor: Please sign and give the original Deed of Gift to the receiving grain elevator.
  2. Elevator: Contact us as soon as possible, by faxing the form and by a phone call. Please fax (816-756-5089) or email a copy of this signed Deed of Gift to the attention of one of the individuals noted above, so that we can track and notify interested parties of your gift.

This form applies whether the gift of grain is for a parish, school, Forward in Faith Campaign or another ministry of the Diocese.

©2017 Diocese of Kansas City–St. Joseph

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