What About Crop-Share Landlords
We are following one last time on our posts from last week on gifting of farm commodities to a charity.
One reader asked if crop-share landlords are allowed to do this. The quick answer is yes, however, the crop-share landlord will get no extra special tax savings.
Whatever amount the landlord gives to charity will have to be reported as income and the landlord will get an offsetting charitable deduction. However, if the landlord does not itemize, then this deduction has no value.
Another reader asked if we need to get a written bill of sale on the transfer. In our opinion, the farmer should provide a written bill of sale for on-farm storage of crops that are donated. We would also recommend working up a bill of sale for crops stored at a local elevator that are then transferred to the charity. Likely, having the elevator transfer the grain out of the farmer’s name into the charity on their books is likely sufficient, but it does not hurt to have a written bill of sale too.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
Why are the rules different for landlords? I fill out a Form 4835. I understand I get no benefit as I pay no SE taxes. But, why would I have to report the gift to charity as “income”?