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  • 1.  Grain Acknowledgement

    Posted 11-07-2023 09:14 AM

    Good morning! 

    We recently received our first gift of grain. The grain was sold immediately, and we received/processed those funds. I am wondering how we should be acknowledging this gift. I believe we need to send the same acknowledgment as our GIK, where we just acknowledge that they gave XX number of bushels of XX Grain, but our VP is asking if we can add the amount of money we received for the grain to the letter. I know we cannot do that for our GIK, but I'm wondering if grain would be different for any reason. Is it an IRS regulation as to why the value of the gift would not be provided to the donor? Is there anything else we would need to provide to the donor for this type of gift?

    Thanks for your guidance! 



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    Suzie Weesner
    Indiana Wesleyan University
    Suzie.Weesner@indwes.edu
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  • 2.  RE: Grain Acknowledgement

    Posted 11-07-2023 09:20 AM
    Never add an amount per IRS Publication 1771. Grain is not different and what you sell any property gift for is your business not the donors!

    John

    John H. Taylor 
    919.816.5903 (Cell/Text)

    Big Ideas; Small Keyboard



    Original Message


  • 3.  RE: Grain Acknowledgement

    Posted 11-07-2023 09:41 AM

    Thank you! I knew you'd be able to get me a quick answer on that! 

    Suzie



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    Suzie Weesner
    Indiana Wesleyan University
    Suzie.Weesner@indwes.edu
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    Original Message


  • 4.  RE: Grain Acknowledgement

    Posted 11-07-2023 02:53 PM
    Gifts of grain are a little different from other GIKs. The farmer doesn't actually take a tax deduction for the value of the grain. Instead, they get to deduct the production costs of the grain without having to recognize income from selling the grain. This is not a tax deduction, and the farmer does not need an 8283 for a contribution over $500 or a qualified appraisal for over $5,000 either. A typical acknowledgement for a gift of grain will include the description, quantity, and selling price of the grain, but will indicate that this acknowledgement is not a tax receipt for the purposes of claiming a deduction. In other words, like John said, a GIK receipt shouldn't specify the value of a contribution. However, since the donor does not need a GIK receipt because they are not substantiating a contribution, the acknowledgement they receive is not technically a GIK receipt, and thus is permitted to list a value. 

    Note that the total received and the gift value may be different amounts. Orgs will typically list the cash received from the sale of the grain, but subtract any associated costs paid by the org, which then becomes the gift value. This is especially important if the grain gift is connected to a DAF or other method of gift designation. (Some orgs allow the donor to make the gift, then deposit the proceeds in a DAF that the donor can advise, or allow the donor to designate the contribution as a quasi-restriction). The gift value is the amount credited to the DAF or designation, not the total received from selling the grain. 

    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:




    Original Message


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