Donate fruits to charities

[New York Enrolled Agent]

property held (more than 1 year) for personal use is a capital asset, therefore LTCG

Thanks for sharing something with me I never knew - learn something new every day.

So if the taxpayers decided to SELL their produce, they would get capital gain treatment on the sales of the fruits???

[Snaggletooth]

Ridiculous

I can't believe anyone, especially Sluggo, could believe produce such as fruit could be LTCG property.

Fruits/produce are operational revenue items. Even if no revenue they should be considered as such. In fact, they would even meet the definition of inventory, and can even have an associated cost if rules for absorbing overhead are observed.

The key word above is "operational" as opposed to being investment items. The trees come closer to being "investment items" and if sold could conceivably be reported on a 4797.

Fruit is not capital gain property, even if held for over a year. In fact, I'm not sure what value fruits would have if over a year old since they are perishable items. Maybe some rare exotic fruits can last more than a year, but certainly none of the common fruits like bananas, oranges, cantaloupes, apples, etc.

Deduct the FMV if given timely to the charity before they rot. I would consider them as absorbing overhead and bearing a cost, thus I would not deduct overhead expenses if the remainder of the operation were applied against income.

[Rapid Robert]

If you consider the annual growth cycle of citrus trees, it's arguably a year-long cycle, so by the time the fruit is picked and donated it is close to a year old ... start to finish. Furthermore, some kinds of oranges and lemons can be left on the tree for up to a year after they first ripen.

That is all a reeeealllllllll stretch of anyone's common sense understanding of fruit growing on trees. Tell me the last time you consumed an orange that had been on the tree for a full year.

Of course, we may see more of that in California, once all the migrant farm worker bad hombres are booted across the border wall. Lots of produce will be left to rot in the field, a lot of which normally goes to most of the rest of the country.

[TAXNJ]

Thanks for sharing something with me I never knew - learn something new every day.

So if the taxpayers decided to SELL their produce, they would get capital gain treatment on the sales of the fruits???

Keep smiling.. Again, "Generally, property held for personal use is a capital asset. Gain from a sale or exchange of that property is a capital gain."

You question "taxpayers decided to SELL their produce, they would get capital gain treatment on the sales of the fruits???" in this reply post does not specify if it applies to personal use property or business assets; investment property and/or property used for the production of income.

and as you may know, everything depends on facts and circumstances and their interpretation, before one makes a decision. No different then when a reply poster recommends to a poster to review a number of specific sections of the IRS code to their posted scenario. At that point the poster can review the suggested sections of the IRS code to see if the sections may or may not apply to their posted scenario.

So the benefit of this forum is to take all the suggested reply posts and decide after their own research what may apply to their specific scenario. To do otherwise could be misleading.

[JohnH]

So is there absolutely no other possibility? Such as growers paying higher wages to US citizen employees, which in turn are passed along to consumers as higher prices? Or perhaps hiring migrant workers who are properly documented, even though they would need to be paid more than illegal aliens, with those costs built into the final price? Unless all the growers are complete idiots, it seems to me that after some initial adjustments, supply and demand would somehow sort out this market in much the same way as it does other commodities.

[TAXNJ]

I can't believe anyone, especially Sluggo, could believe produce such as fruit could be LTCG property.

Fruits/produce are operational revenue items. Even if no revenue they should be considered as such. In fact, they would even meet the definition of inventory, and can even have an associated cost if rules for absorbing overhead are observed.

The key word above is "operational" as opposed to being investment items. The trees come closer to being "investment items" and if sold could conceivably be reported on a 4797.

Fruit is not capital gain property, even if held for over a year. In fact, I'm not sure what value fruits would have if over a year old since they are perishable items. Maybe some rare exotic fruits can last more than a year, but certainly none of the common fruits like bananas, oranges, cantaloupes, apples, etc.

Deduct the FMV if given timely to the charity before they rot. I would consider them as absorbing overhead and bearing a cost, thus I would not deduct overhead expenses if the remainder of the operation were applied against income.

Roland's 2-27-17 reply post has its merits as well as your reply post. So, to "believe" any of the reply posts, one can review the suggested reply posts and decide after their own research what may apply to their specific scenario.

But to state "I can't believe anyone, especially Sluggo, could believe produce such as fruit could be LTCG property." is unfair to Roland's reply post just as if someone stated the same to your reply post.

A lot depends on the assets classification if it is personal use property or business assets; investment property and/or property used for the production of income.

[TAXNJ]

That is all a reeeealllllllll stretch of anyone's common sense understanding of fruit growing on trees. Tell me the last time you consumed an orange that had been on the tree for a full year.

Of course, we may see more of that in California, once all the migrant farm worker bad hombres are booted across the border wall. Lots of produce will be left to rot in the field, a lot of which normally goes to most of the rest of the country.

Are you also a Pomologist? Was the last sentence of your post necessary.

[TAX4US]

I seem to recall there was a piece of this mentioned in the farm tax guide. May want to leaf through it for donations of fruits or other commodities.