Gifts of Grain or Livestock
Farmers or ranchers looking to minimize their tax liability
can donate crops or livestock to the Montana Community Foundation, make an impact on their community
with a significant gift, and reduce their taxable income.
When a farmer or rancher transfers legal ownership of commodity to a
charity before it is sold, the producer will not have taxable income from
a sale. The Foundation can make arrangements to sell the livestock or grain,
and the producer can still deduct production costs on their income
taxes. Tax savings may be realized on federal income tax, state income
tax and self-employment tax, depending on the farmer or rancher’s
specific circumstances. As with any charitable gift, it’s best to consult
your tax advisor and the charity before making the gift.
For example, assume a farmer generally gives $5,000 annually to his
local community foundation and is interested in gifting that amount
in commodities in 2012. The farmer gives the community foundation
1,000 bushels of wheat when the market price is $5.00 per bushel.
The farmer does not claim a charitable deduction for the market value
of his donated wheat. Rather, he receives tax benefit by reducing
his total amount of taxable income by gifting the commodity to the
Foundation and deducting the production expenses.
Steps to Make a Gift of Grain
Steps to Maike a Gift of Livestock
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