Example: Ralph and Marge farm several hundred acres of cropland. Each year during the harvest they deliver one truckload of grain to their local elevator in the name of their favorite ministry. All the paperwork they receive when delivering this load shows the ministry as owner.
Once notified that they have a load of grain in their name, the ministry orders the elevator to sell at the current per bushel price. In a few days a check for the net value of the donated grain arrives at the ministry’s office. The cash gift is then put to work accomplishing the mission that Ralph and Marge so dearly love.
Though Ralph and Marge do not receive a charitable tax deduction for the gift of the load of grain – they do receive a kind letter of acknowledgement from the ministry leader. This confirms that the grain has been sold and that the ministry is putting the net proceeds of the sale to work accomplishing the mission.
In lieu of a charitable tax deduction, Ralph and Marge get to deduct the cost of producing the grain, and do not have to realize the taxable income that the sale of the grain would have produced. The net tax impact of their commodity gift is beneficial to them.
As with all gifts of non-cash assets, the tax rules are specific, and you should consult your own tax professionals before making a gift of any commodity.
