Gifts of Grain

Gifting grain directly to Practical Farmers (rather than selling the grain and making a gift from the proceeds) may provide farm operators with more significant tax savings.

Contributing grain 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 your self-employment tax and reducing your adjusted gross income.

How it works

  • You must be a farm operator to make a gift of grain. 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.
  • Be sure the gift is grain commodities, and not a grain storage receipt. A grain storage receipt could be considered a cash equivalent. Practical Farmers must be able to demonstrate “control and dominion” over the gifted property. As a donor, you cannot offer Practical Farmers any guidance on when to sell the commodity.
  • Be sure to accomplish Farm Service Agency certification before making a gift of grain if you annually certify or document bushels of production with FSA through your participation in various agricultural subsidy programs.

Make a gift of grain