Farmer - food donation

[natiro]

If a farmer (not incorporated) made a charitable contribution of surplus food in 2006, is the donation limited to basis?

Thanks.

[Snaggletooth]

Yes

A neighbor farmer several years ago grew food and gave it to a VA veterans home. The residents loved it since it was fresh and suitable for home cooking instead of the bland institutional stuff they normally eat. He was audited for different reason.

Could not deduct the food as charity. Only his "basis" which essentially was only the cost of seeds. Had his own seed potatoes, no cost. No indirect costs such as gas for the tiller, pesticide, etc. They allowed him $15 for his investment in the seeds which produced the food.

IRS auditor was really proud of himself. I'm sure he made a big hit with the residents of the VA home when farmer never brought any more food.

[Jiggers]

Basis of donation

You get no deduction for something that you have no basis in. The farmer already wrote off all the expenses related to growing the produce.

That is like farmers that want to deduct the value of the calf that died. No can do.

That is like landlords that want to deduct the rent that they don't collect. No can do.

For him to stop giving the surplus food just because he can't deduct something, makes me wonder where his heart really is.

[Snaggletooth]

No Problem with Heart

I grew up next to this farmer, and there was no problem with the heart. Planting, cultivating, picking and delivering this food was done at the expense of several hours of his time (for which no deduction is allowed). He grew about 5X the amount of food that his family ate, and gave all the rest to VA home. He offered garden stuff to us neighbors but we all had our own gardens.

This VA home was mostly for deranged WWII veterans who were too close to explosions and artillery shells -- they all suffered from shell shock. The food was not the extent of this farmer's support. He did free maintenance work and provided transportation to these veterans when they needed it. He continued to support the home until he became too old himself. But he never again brought food.

[veritas]

I would check your state also

Oregon has a 10% tax credit for crop gleaning.

[jainen]

charity is not worthwhile

>>he never again brought food<<

Maybe he realized that personal charity is not worthwhile unless the government subsidizes it.

[natiro]

Food donation

Thanks all for the answers. Especially to Veritas. I'm in Oregon and will look at that tax credit. I've never had this come up and never paid attention.