California Ag Network

Tag: charitable donations

  • Golden State Farm Credit Supports Local Students with Back-to-School Backpack Donation

    Golden State Farm Credit (GSFC) recently donated 25 backpacks filled with school supplies to support students and families through The Salvation Army of Chico’s Back-to-School program, an annual effort to ensure local students are prepared for a successful start to the school year.

    Recipients of the program will receive a backpack filled with various school supplies such as notebooks and paper, writing utensils, a calculator, and a lunchbox. Each donation will support a child in need living in Chico, Paradise, Magalia, or Forest Ranch, helping relieve the financial burden from local families, parents, and guardians.

    GSFC has previously partnered with The Salvation Army of Chico, particularly through its annual participation in the Angel Tree program, which provides Christmas gifts to hundreds of children in the region. This back-to-school effort represents a meaningful extension of that partnership and a shared commitment to serving the community year-round.

    “We’re proud to support programs that provide local youth with the tools they need to succeed,” said Kris Costa, director of marketing and communications at GSFC. “Supporting the Angel Tree Program has always been a meaningful experience for our team, so when The Salvation Army invited us to be part of their back-to-school effort, we were excited to jump in and help.”

    This donation is part of GSFC’s ongoing commitment to serve and strengthen rural communities. The association’s community outreach pillar extends beyond supporting local agriculture organizations, activities, and events; they believe in supporting families in the community when the need arises. Looking ahead in 2026, GSFC plans to connect with other Salvation Army locations near its branch offices to expand the backpack donation effort.

    About GSFC:

    Golden State Farm Credit (GSFC) is a lending institution of the Farm Credit System with offices in Northern and Central California that service the counties of Butte, Glenn, Tehama, Shasta, Trinity, Fresno, Kings and Tulare. The GSFC administrative office is located at 3013 Ceres Avenue, Chico, CA 95973. The Farm Credit System (System) is a nationwide network of borrower-owned lending institutions that provides loans, leases, and related services to farmers, ranchers, rural homeowners, agribusiness, agricultural and rural utility cooperatives, and Young, Beginning and Small Farmers nationwide. Congress established the System in 1916 to provide a reliable source of credit for the nation’s farmers and ranchers. Today, the System provides more than one-third of the credit needed by those who live and work in rural America.

    For more information about Golden State Farm Credit, call (530) 895-8698 or visit us online at www.goldenstatefarmcredit.com.

  • How Farms can Donate Fresh Food for Tax Deductions

    Charitable Contributions for Farmers

    It is common for businesses to receive tax deductions for cash donations, but did you know that the agriculture community can donate fresh foods for a similar benefit? California farmers and agriculture businesses have the opportunity to donate fresh fruits and vegetables in return for some pretty hefty tax breaks.

    How much is the deduction? 

    In order to calculate the federal deduction and the California credit, your accountant will need to know the cost basis of the donated fruit as well as the fair market value (FMV) of that fruit as of the date it was contributed.

    Normally, the federal deduction for inventory contributions is limited to the FMV on the date of contribution or the cost basis of the inventory, whichever is lower. However, there is an enhanced deduction allowed for the contribution of food inventory to a qualified organization that allows for an “above-basis” deduction. This deduction equals the lesser of: (1) the basis of the contributed inventory plus one-half of the ordinary income that would have been recognized if the inventory had been sold for FMV on the contribution date, or (2) twice the basis of the property. As is often the case, there are special rules for certain taxpayers. If you are not using full absorption to account for your inventories, consult with your accountant as special rules will apply.

    For farm partnerships, the result of the above calculation would be passed through to the individual partners within the partnership. The deduction is then limited to 15% of their net income from all businesses that made food contributions. This means that their deduction would be limited to 15% of their net income from the farm entity that made the donation. If individual farmers who are also partners in farm partnerships made food contributions to qualified organizations, then the net income of both activities would be added together in determining the 15% limitation. Any unused deduction can be carried over and used in the five succeeding tax years.

    California law

    Under California tax law, a qualified taxpayer who donates fresh fruits or fresh vegetables to a food bank located in California is allowed a tax credit equal to 10% of the cost that would otherwise be included in inventory costs. In the case of farm partnerships, the credit would be passed through and used by the individual partners. Any unused credits may be carried forward for seven years. It’s important to note that this credit has expired, however, there is a possibility of extension, so speak with your accountant to learn more.

    Here’s an example

    Partnership A owns a farm that grows fruit.  The partnership donates unsold fruit to the local food bank.  A determines that the basis of the contributed property is $180,000.  A also determines that one-half of the ordinary income that would have been recognized if the inventory had been sold for FMV on the contribution date is $40,000.  The deduction would consist of the lesser of: (1) the basis of the property contributed plus one-half the profit = $180,000+$40,000 = $220,000, or (2) twice the basis of $180,000 = $360,000.  In this case, the lesser figure of $220,000 would be the enhanced deduction for the food inventory contributed.  That deduction would be passed along to the partners of the partnership. The charitable deduction on the partner’s tax returns would be limited to 15% of the income from the partnership that made the food donation.

    Please note that if the donated inventory was not included in the opening inventory, but rather was produced during the current year,the donated inventory would be considered to have zero basis. This means that the enhanced deduction for food inventory would only be $40,000 in the example above, as the $180,000 cost of that fruit would instead be included as part of the cost of goods sold deduction in the current year.

    If you have questions about charitable food donations or want to learn more about how to claim the deduction, please contact Sensiba San Filippo Partner, John Slater, at 559.437.0700 or at jslater@ssfllp.com.