Making your farm work for you, your family and charity

Gifting Grain or Cattle

Farmers have a unique opportunity to gift grain or livestock directly to charity. By doing so, you, the producer, remove the commodity from inventory, avoiding the income, Medicare, and self-employment taxes you might need to pay if you made a cash sale. While the gift does not create a charitable deduction, you can likely take all the deductions for production costs. Many donors find they can then use the standard deduction when they file their taxes.

To qualify for all the tax benefits, be sure to follow the rules. We suggest discussing the strategy with your accountant, then giving us a call! We will be happy to walk you through the process so you can use your farm commodities to do the Lord’s work among our ministries. We will even help you pass through your gifts to other charities.

Learn more about gifting commodities to TLHA.


Donor-Advised Funds

With farming, some years the income is just not there. Then one year, it is! In a high-tax year, some of your neighbors are using a Donor-Advised Fund (DAF). Some call it their “Charitable Checkbook!”

This is how it works…

  • You set up a DAF account with a charity or foundation.
  • Any cash or asset you place into the account is viewed by the IRS as a completed charitable gift in the year you make the gift. In a high-income year, when tax benefits have the most impact, you can load up the account with commodities or cash for the tax benefits.
  • Within the DAF, investments grow tax-free year after year.
  • You distribute your gifts by advising the custodian what you want to do. That is when your gift goes to work, supporting your chosen charity.

For people whose income is high some years and not others, a DAF provides tax benefits in the years you need them and allows you to provide steady support for the charities you love year after year.

Visit about Donor-Advised Funds!


Retirement Planning

When you as a producer transition to retirement, you may need to liquate equipment, livestock, grain, and sometimes real estate over a short period of time. This result? Years of hard work is lost to taxes. Depending on your state, some income can be taxed at rates as high as 50%! But for a person who loves to support ministry, it does not have to be that way. 

One option, you can use a Donor-Advised fund, as described above.

However, you may need retirement income from your farm assets. When the Lord calls both of you home you may want to continue that income stream to children or grandchildren. There is a giving tool that does that, a Charitable Remainder Unitrust (CRUT). We call it “a gift that gives back to you” and your family.

Benefits of a CRUT

  • When highly taxed assets are transferred to a CRUT, they can be liquidated with no tax consequences.
  • You can use cash, commodities, appreciated real estate or investments, or depreciated equipment.
  • You can add more gifts during the term of the trust.
  • The trust provides a dependable income stream for the first set of beneficiaries you choose.
  • The income stream is drawn from assets that were untaxed when sold, so income can be substantially higher than returns based on after-tax assets.
  • Long after the CRUT’s donors have passed, the trust continues to make an impactful difference for your family, church, and charities you love.

Download our Ag Philanthropy white paper.

Learn more about creating a CRUT.


Case Study: Turning Their Lives into a Lasting Legacy

Harold and Lorraine Olson worried what would become of the assets of their farm – a place that had been the center of their lives for so many years, the place where they had raised a family and crops, blessed abundantly by God.

The Olson’s wanted to pass down their faith and the value of those blessings. TLHA presented the couple with a solution to their financial concerns – a charitable remainder unitrust (CRUT). Read more.


Financial and Legal Considerations

Establishing a Charitable Remainder Trust is best handled by an attorney who is familiar with philanthropic gifts and agriculture. Trust administration requires the timely transfer of assets, sale by the trustee, then investing funds, making timely distributions, preparing unique IRS and state tax documents and, in some states, issuing an annual report to beneficiaries. Because of these requirements, The Lutheran Home Association and its Foundation have become preferred partners for producers who wish to avoid unnecessary taxes so they can use their assets to benefit family, faith, and community. We work with an experienced attorney and your tax professionals to structure the CRUT to reach your family goals and use the CRUTs tax-saving power for your best advantage.

Contact us to learn more.


The contents of this page should not be considered legal or financial advice. It is intended as a general discussion of concepts for possible plans and actions. The material presented does not address all issues, exceptions, or exclusions. Please consult with your own legal and financial professionals for advice.