The Right Way to Gift Crops to Charity

July 19, 2010 02:47 AM

Nebraska farmer pledged 10 acres of his production to charity. His county FSA office said this is not allowed under program rules and he could lose program benefits.

This should not be the case, other than possibly affecting eligibility of those bushels for the CCC loan program, attorneys say.

It makes sense that if you transfer ownership of the produced bushels, they are not available to you as collateral for the CCC loan program and its benefits such as marketing loan gains.

In calculating your adjusted gross income for eligibility for direct payments and the like, however, “with commodity gifts to charity it doesn't show up on Schedule F, so it appears as an AGI reduction above the line. It's below the AGI line if it’s a cash gift,” notes Roger McEowen, ag law professor at Iowa State University. “If you annually certify your bushels of production for farm program purposes, be sure to accomplish your certification before any donation to charity is made.”

He recommends you deliver the crop to the elevator after harvest and have the elevator make the storage receipt out to the charity. The receipt is delivered to the charity with a letter from the donor indicating that the commodity now belongs to the charity, which may sell it as it deems appropriate. “No check is made payable to the charity at the time the farmer delivers the crop to the elevator.”



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