We’ve heard the term “unprecedented times” a lot this year. And, while we are probably a bit tired of hearing that phrase, we must admit this has been a year unlike any other.  

As the rollercoaster that has been 2020 approaches its ride into the sunset, we couldn’t be more proud of the work of our current Associates and KARL Fellows who have stepped up to serve our Kansas communities and agriculture. For those who joined us for the most recent KARL Café and a conversation about civil discourse, we heard firsthand from Dr. Timothy Shaffer the value of communication as we navigate change. See it here: KARL CAFÉ.

Next month, we’ll share with you the KARL 2020 Annual Report. We’ve got great results to share with you, and despite the challenges before us, we’ve never stopped working.  

With everything that has happened this year (or not happened!), we can all conclude that we are proud to be Kansans and in America’s heartland. We are grateful for a bountiful harvest and the freedom to choose to be a part of agriculture and the KARL family! 

Enjoy your October edition of KARL Matters

After several months of dedicated individuals, the KARL Program is happy to announce the launch of our brand new website. The website has been completely redesigned to provide visitors with an easier way to learn about the KARL Program, who we are, our curriculum, how to nominate/apply, and even make a charitable gift.

Visit often as updates will include links to our KARL Cafés, events, and more!

www.karlprogram.com 

For 19 years, the KARL Program has hosted a Sporting Clay Benefit in memory of Dan Snyder of Lyons, KS. Dan served as a board member from 2002-2008, serving as chairman in 2007-08. Dan was instrumental in starting this annual event which is now one of longest standing fundraisers for the program.  

Members of Dan's team who participated in the annual event on Saturday, October 17. Pictured L-R: Wayne Sheevel, Chris Detmer, Kevin Logan, and Mark Darrah. 

For those who do not Itemize Deductions: Included within the Coronavirus Aid Relief and Economic Security (CARES) Act, Congress wanted to provide some relief to charitable organizations. The Act permits eligible individuals who do not Itemize Deductions to deduct $300 of qualified charitable contributions as an “above-the-line” deduction (i.e. an adjustment to arrive at Adjusted Gross Income (AGI)) for tax years beginning in 2020.

As the calendar year draws to a close, thoughts of charitable giving may be on your mind. With recent tax law changes enacted under the Tax Cut & Jobs Act, itemizing deductions - which includes charitable contributions - on individual tax returns, may be superseded by a much higher Standard Deduction afforded to taxpayers ($24,000 for a Married Filing Jointly couple and $12,000 for a Single taxpayer).

Consequently, for many of us involved in farming, charitable giving in the form of “gifting grain” may become more appealing than a cash donation. In case you are unfamiliar with gifting grain, here is what you need to know as a “cash basis” farmer looking to make a charitable gift before year end:

• In lieu of gifting cash to your favorite charity, consider contacting your local coop or grain handler and transfer bushels of grain from your name to the name of a charity
• Ask the coop or grain handler to provide a warehouse receipt to the charity (or some form of support)
• Inform the charity that you have gifted grain, and provide them contact information to the coop or grain handler so they can call and sell the grain (NOTE: This is a key component of gifting grain – 100% of the risk of ownership including storage and market price fluctuations transfers to the charity)

The potential tax savings for a farmer who gifts grain includes the following:

• The cash basis farmer can exclude the sale of the grain from his taxable income
• Federal income tax savings (up to 37%)
• Self-employment tax savings (15.3%)
• State income tax savings (up to 5.7% for Kansas)

No charitable deduction is reported by the taxpayer, so the married farmer who has less than $24,000 of Itemized Deductions (i.e. medical expenses (on a limited basis), state and local taxes, charitable giving, and mortgage interest on a house), can take advantage of the $24,000 Standard Deduction along with the reduced farm income from gifting the grain.

Example of Gifting Grain – Joe and Jane Farmer:

Joe and Jane Farmer typically donate $10,000 to their hometown church each year. Instead of donating cash in 2018, they chose to gift 1,250 bushels of soybeans when the market price was $8.00 per bushel. Assuming the Farmers have not exceeded the maximum self-employment tax limit, their potential tax savings could be ~$5,600 (37% federal savings, 5.7% Kansas savings and 15.3% self-employment tax savings). If they had simply gifted cash, their savings would have only been $3,700 (if they were able to Itemize Deductions).

As always, please consult with your tax accountant or CPA who can advise you as it relates to your own personal tax situation.

Julie Spiegel, Class VIII Fellow

Varney's & Associates

Until next time, be safe and stay connected. #BeLegendary