Gifts of Grain
Maximize your tax benefits while supporting your Catholic faith
The Diocese of Toledo is pleased to make our parishioners who are agricultural producers aware of the tax savings available when charitable gifts are made using commodities. Replacing the cash donations you give each year with gifts of grain can increase the amount of tax savings that you realize through charitable giving. There are two reasons for this:
Giving a commodity means this is a sale that your business never realized. This income will not be recorded on your taxes and you will also save the money that you would have paid in self-employment tax on that amount.
- Smart Gifts! Donating to maximize your impact
By providing a gift of grain to the Diocese of Toledo, you are maximizing your impact while minimizing the tax consequences of the grain that you've donated. Your crops are the result of the hard work you've invested in your farm operation. By providing a portion of what you've grown to the Diocese of Toledo, you're investing in the future of our faith, and create a legacy that will sustain our 19 counties for generations to come.
- Smart Gifts! Gifts of grain made simple
Choosing to donate a gift of grain to the Diocese of Toledo is simple.
To ensure compliance with tax laws, farmers wishing to donate a commodity should follow these steps:
Notify the Mission Advancement Office for the Diocese of Toledo of your intended gift by phoning or writing us. Describe what the commodity is and the quantity being contributed. Retain a copy of the letter for your records. (The gift should be from unsold crop inventory with no sale commitment made prior to the gift.)
Transfer the grain as a gift to the Diocese of Toledo by having the elevator send a warehouse storage receipt to the Mission Advancment Office. The elevator's receipt must show the Diocese of Toledo as the owner of the grain.
Important: please notify theMission Advancement Office when you have delivered the grain to the elevator.
The Diocese of Toledo will provide you with a donation receipt for your gift. Do not report the donation on your tax forms as you are not entitled to any additional deduction. The tax benefit comes from deducting your production expenses as usual and not reporting the sale on Schedule F.
The Diocese of Toledo will sell the grain and receive the sale proceeds. Any sales invoice will name the Diocese of Toledo as the seller of the grain. Per Internal Revenue Service (IRS) rules, it is necessary that the charity had 'dominion and control' of the commodity.
Here is an illustration of how giving through a gift of a commodity can reduce your tax obligation.
Freddie and Frieda Farmer normally make $10,000 in annual contributions to their favorite local charities. This year, they chose to give this amount by giving 2,000 bushels of corn when the market price is $5.00 per bushel. When they deliver the corn to the elevator, they advise the elevator they want to give the grain to five qualified (tax exempt) charities. Assuming the couple has a taxable income of $100,000, the following tax savings will apply:
Assuming the Farmers have not exceeded the maximum self-employment tax limit, they will save 15.3%, or $1,530 of self-employment tax.
They will save 22%, or $2,200 of federal income tax and 8.53%, or $853 of state income tax.
The total tax savings from the gift of the corn is $4,583. If they are able to itemize, the only savings from $10,000 of cash gifts would be $2,200 of federal income tax and $853 of state income tax. If they are unable to itemize on their tax return, they would not recognize a tax savings by making a cash gift.
Each agricultural producer's situation is different. Please consult your professional tax advisor on whether using a gift of grain can benefit you. Some agricultural entities may not benefit from gifts of grain because they are not treated the same way from a tax perspective, for instance, this may include crop share agreements and C-corporations.
Disclaimer: This content 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.
Gifts of Grain serve as a way for agricultural producers to maximize tax benefits while supporting the Diocese of Toledo.
Mission Advancement Office
missionadvancement@toledodiocese.org
419.214.4906