harvesting for our Future
Donate Grain to Power PlaY
Why donate Grain?
Donating a gift of grain to the Children’s Discovery Museum Foundation is a simple way to make a lasting difference. Your gift of grain supports playful learning throughout our Ag Exhibit. Our museum has proudly served 2.5 million visitors over the last 20 years in Uptown Normal. That’s a lot of play! Your support ensures our content and beloved exhibits are current, relevant, and engaging for our young visitors.
How you benefit
By giving grain to the Children’s Discovery Museum 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 can be 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.
How to complete your Gift
Following these 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 CDM Foundation, you won't be eligible for the tax benefits described in this brochure.
Let the Children’s Discovery Museum know which elevator you will be taking the grain to. The gift should be from unsold crop inventory with no sale commitment made prior to the gift.
Deliver the grain to the elevator in the Children’s Discovery Museum’s name and fill out the Notification of Gift of Grain Form at the bottom of this page to let us know where and how much grain you donated.
Send a settlement report to the Children’s Discovery Museum. This must show the Museum as the owner of the grain. (Avoid making a gift of an actual warehouse receipt; give the grain itself.)
We will provide you with a donation receipt for your gift. Remember it is non-deductible on your taxes. You don't have to declare this amount of grain as income to your farming operation.
After the grain is donated, the elevator will sell it at the spot closing price on the day of delivery for the Children’s Discovery Museum (CDM). The scale ticket will name the CDM as the seller of the grain and the CDM will receive the sale proceeds.
Gift of Grain...How it works!
Income | Without the Charitable Gift | With the Charitable Gift |
Other income from farming | $35,000 | $35,000 |
Income from grain sale | $15,000 | $0 |
Total Income* | $50,000 | $35,000 |
*You pay employment, federal income & 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 costs of producing the crops; thereby commonly the cost basis is zero ($0, making the gift, in effect, non-tax deductible.
aDDITIONAL tIPS FOR gIFTING gRAIN
- Timing – Gifts of grain to charity can be made from the current or previous year’s harvest.
- Unsold Commodity – The gift must be from unsold crop inventory with no prior sale commitment. A farmer will gift the grain to the Children’s Discovery Museum Foundation (CDM).
- Physical Delivery – Be sure the gift is farm commodities, not warehouse receipts, which could be considered a cash equivalent. The CDM must be able to demonstrate “control and dominion” over the gifted property.
- Retention of Control – Farmers cannot offer guidance in the transfer agreement as to retention or sale of the gifted commodity.
- Documentation – the transaction must be well-documented to show the CDM as owner of the grain. A Gift of Grain Notification Form and a properly executed warehouse receipt in the CDM’s name must be completed. The original sales invoice for the gift of grain must list the CDM as the seller.
- Storage & Transportation Costs – After the transfer of ownership of the grain. The CDM assumes the risks of storage, marketing, and transportation costs, as well as price risk.
- Crop Share Landlords – Crop share landlords cannot gift grain. Shares of crop are rental income that must be reported as income on their tax return.
- Tax Outcomes – Costs associated with growing the crops may not be deductible if those costs are incurred in the same year as the year of the donation of the grain. Therefore, gifts made from the prior years’ unsold crop inventory may offer the best tax results. Tax outcomes are also impacted by whether a farmer does cash or accrual accounting. See your tax advisor to determine if this is the best course of action for your circumstances.
- Farm Corporations – The benefits described here apply to the calendar year-cash basis sole proprietorships. Corporations are not treated the same way from a tax perspective. Ask your tax professional to see if your farm operation can benefit from a charitable gift.
- Government Payments Limitation Caps – The gift of grain will not count as income in government payments limitation cap.
Contact: Sammi Kern, Development Director Email: skern@normal.org Phone: 309-433-3402
