As harvest season approaches, many charitable organizations statewide are preparing to get gifts of grain from Nebraska’s farmers. Those farmers can choose to donate a portion of their stored or harvested crops and get a tax deduction at the same time.
John Syverson, a certified financial planner, says there are a number of advantages to donating crops instead of cash.
Syverson says, “Not only do you exclude from income the amount of the value of the grain, which works better on your tax return and gets you lower taxation in federal, state and self-employment taxes, but you also get to deduct the cost of production of that grain because you had to pay for the input.”
Syverson says rather than contacting the non-profit group or grain elevator directly, it’s usually more efficient to go to a local Community Foundation. He says most of them in Nebraska are set up to help make the donation a smooth transaction.
“Instead of talking to your local Boy Scout troop, I would go talk to your Community Foundation,” Syverson says. Just ask if they take gifts of grain and if they do, you can quickly set up an account and tell them where you want the grain dispersed.
More Nebraska farmers may be choosing the option this fall as many commodity prices are dropping, especially with record or near-record harvests predicted for both corn and soybeans.