Gifts of Grain and Livestock

Benefits of Gifting Agricultural Commodities:

Nebraska farmers and ranchers can save significant taxes by contributing commodities such as corn or cattle to their community foundation fund instead of making a cash contribution after selling the commodities.

When an agricultural producer transfers legal ownership of grain or livestock to a 501(c)(3) charitable organization such as the Nebraska Community Foundation or for the benefit of one of NCF’s affiliated funds before the commodity is sold, the producer will not realize taxable income from a sale, thus minimizing taxes. The producer is still able to deduct the entire cost of the production of the commodity on the producer’s Schedule F. Depending on the producer’s specific circumstances, savings may be realized on federal and state income tax and self-employment tax.

For example, a gift of 1,000 bushels of corn when the market price is $3.00 and the cost of production is $2.00 reduces taxable income by $3,000 ($3/bushel).  The producer still receives a deduction for the costs of production.  A typical farmer who does not itemize deductions on Schedule A might reduce his federal income tax by $150 (15% X $1,000), his state income tax by $60 (6% X $1,000) and self-employment (social security) tax by $141 (15.3% X $1,000 X 92.35%) for a total tax estimated savings of $351.

A producer should consult with his or her tax advisor to determine whether a contribution of commodities is appropriate to their tax situation.

The Nebraska Community Foundation can help your client make a gift of commodities to benefit the local community foundation fund and get the desired tax treatment. Most importantly: “Your client must provide written documentation to both NCF and the grain elevator or sale barn of the transfer of title of the commodity.”  The Nebraska Community Foundation must be in control of the sale of the commodity

See Steps to Make a Charitable Gift of Grain or Steps to Make a Charitable Gift of Livestock for the steps for making a gift of commodities.

For assistance with a gift of commodities contact one of the following:

Diane Wilson
Chief Financial & Administrative Officer
402-323-7333 or .(JavaScript must be enabled to view this email address)

Doug Friedli
Director of Community Fund Development-Eastern Nebr.
402-323-7343 or .(JavaScript must be enabled to view this email address)

Jana Jensen
Director of Community Fund Development-Western Nebr.
308-588-6299 or .(JavaScript must be enabled to view this email address)

This information is intended solely to inform you of a potential gift planning opportunity. The Nebraska Community Foundation is not a tax advisor. You may not rely on the information contained herein for the purpose of avoiding tax penalties and you should consult your tax advisor to determine whether the information presented here is appropriate to your tax situation.