Giving a Gift of Grain – Growing the Future with Cropsey Area Community Fund at
Growing the Cropsey Area Community
Your crops are your livelihood. You prepare, you plant, you nurture and they grow. That’s what we
do with the charitable gifts entrusted to us through Illinois Prairie Community Foundation, and we invite you to grow the future of your community with us.
Why Donate Grain?
Donating a gift of grain to the Cropsey Area Community Fund through IPCF is a simple way to make a lasting difference. The value of the grain can be used to support the Cropsey Area Community Fund’s efforts to improve and beautify public property in Cropsey Township and Belle Prairie Township.
How You Benefit
By giving grain to the Cropsey Area Community Fund through Illinois Prairie Community Foundation, you avoid including the sale of the grain in your farm income. Although a charitable income tax deduction is generally not available to you, the avoidance of declaring it as income is a significant benefit. You deduct the cost of growing the crops which typically results in saving self-employment tax, federal income tax and state income tax. You can benefit even if you don’t itemize your deductions and take the standard deduction.
As each farmer’s situation is different, you should consult your professional advisor for legal and tax advice on how a gift of grain to Illinois Prairie Community Foundation may apply to your circumstances. Nothing in this brochure should be construed as providing you with legal or tax advice.
How it Works
The Cropsey Area Community Fund invites you to donate a gift of grain that will benefit your community forever.
Here is an example:
*You pay employment, federal income and state income tax based on adjusted gross income (less typical exemptions, deductions, etc.).
Note: Crops produced for sale in a farming operation are considered “ordinary income property.” The deduction for a gift of ordinary income property to a charitable organization is
limited to the lesser of fair market value or cost basis. Typically, the cost basis has already been deducted from income as the cost of producing the crops; thereby commonly the cost basis is zero (0), making the gift, in effect, non-tax deductible.
How to Complete Your Gift
Following these specific steps will help ensure you receive intended tax benefits from a gift of grain.
NOTE: If you deliver the grain, sell it and order the proceeds sent to the Cropsey Area Community Fund at IPCF, you will NOT be eligible for the tax benefits described in this brochure.
- Let IPCF know of your intended gift of grain. The gift should be from unsold crop inventory with no sale commitment made prior to the gift.
- IPCF will set up an account at the elevator.
- Deliver the grain to the elevator.
- Transfer the grain as a gift to the Cropsey Area Community Fund at IPCF by having the elevator
send a warehouse storage receipt to IPCF. The
elevator’s receipt must show IPCF as the owner
of the grain. (Avoid making a gift of an actual
warehouse receipt; give the grain itself).
- IPCF will provide you with a donation receipt for your gift. Remember, it is nondeductible
on your taxes. You don’t have to declare this amount of grain as income to your farming operation.
- After the gift, IPCF is responsible for storing and/or transporting the grain and for the risk of loss.
- You cannot control where or when IPCF sells the grain.
- IPCF will sell the grain and receive the sale proceeds and deposit them in the Cropsey Area
Community Fund. Any sales invoice will name Illinois Prairie Community Foundation as the seller of the grain.
Q: Can a crop-sharing arrangement benefit from this technique?
A: It may be possible, depending on individual circumstances. Please check with your tax professional.
Q: Can I store the grain on my farm, not deliver it to an elevator and still make a gift to the
Cropsey Area Community Fund?
A: Yes, you should prepare a notarized letter of grain transfer to the Cropsey Area Community Fund at IPCF in place of the elevator’s warehouse receipt.
Q: Can farm corporations benefit in the same way as the farmer who is a sole proprietor?
A: The benefits described in this brochure apply to calendar year-cash basis sole proprietorships.
Corporations are not treated the same way from a tax perspective. Ask your tax professional to
determine whether your farm operation can benefit from a charitable gift.
Q: Will the gifted grain count as income in government payments limitation caps?
A: No, the gift of grain won’t count as income in your government payments limitation caps calculation.
Illinois Praire Community Foundation works to improve quality of life by connecting donors with
their charitable passions, fostering links between community organizations and convening local leaders to promote the common good. Donors make a difference with the gifts they provide for charitable funds. These funds benefit the community forever and create lasting legacies. We invite you to join in giving back, getting connected and building a better community.
*Disclaimer: The content included in this brochure is for informational purposes only and does not constitute legal or tax advice. Please consult your professional advisor for legal and tax advice specific to your situation.