Gifts of Grain
Gifts of grain are a unique and underutilized way to make a charitable gift. Using grain to make a gift to VCSU can be a wonderful way to invest in the future while achieving tax savings. The value of the grain may be designated for the purpose you choose -- to support VCSU Scholarships, create an endowed scholarship in your family’s name, or support a specific academic program or athletic group. Any gift makes an immediate impact on the students of the fastest growing campus in North Dakota.
Benefits of Gifting Grain
For farm operators, gifting grain directly, rather than selling the grain and making a gift from the proceeds, may provide a more significant tax savings. Gifting grain allows you to avoid the sale of the commodity as income, while the production costs may still be deductible.
Reducing taxable income may provide advantages such as minimizing or eliminating self-employment tax and reducing adjusted gross income. Most farmers don’t itemize deductions on Schedule A, and instead take the standard deduction. Thus, there is usually no tax benefit by making cash gifts to charity, unless significant.
However, gifts of grain to the VCSU Foundation do not have to be claimed as income to the self-employed farmer, but all expenses for growing and harvesting the grain can be deducted.
Gifting grain to the VCSU Foundation can result in a triple savings of tax:
• Federal income tax,
• State income tax,
• Self-employment tax.
How to Make a Gift of Grain
• Consult with your tax or financial advisor. The VCSU Foundation and its employees do not provide tax/legal advice.
• Contact the VCSU Foundation at 701-845-7203 or mail, or email a Gift of Grain Notification Form to the VCSU Foundation to ensure the proper steps are taken for your gift of grain.
• Deliver the grain to your local elevator or co-op and tell them that you wish to transfer ownership to the VCSU Foundation.
• Request a grain storage receipt showing the VCSU Foundation as the owner. The elevator should refrain from selling the grain or issuing a check to the foundation without specific instructions from the VCSU Foundation.
• Notify the VCSU Foundation at 701.845.7203 when the transfer is made, indicating where the grain is being stored.
• The VCSU Foundation will then order the sale of the grain and will acknowledge your gift following the sale.
• The donor cannot provide any guidance in the transfer agreement as to the sale of the grain. VCSU must have control and dominion over the gift.
• The donor assumes cost of the transportation, storage and drying of the grain prior to the transfer being made to VCSU. After the transfer, VCSU will assume all costs of storage, marketing and transportation.
• It is always advised that you consult with a tax advisor prior to making a gift to VCSU.