Green Trust offers grain producers option to save on taxes, benefit South Dakota State University

Grain producers, are you tired of all those taxes being taken out of your hard-earned harvest? The SDSU Foundation has an alternative for you: a Green Trust.

A Green Trust features:

• A savings of 40 percent or more in income tax and self-employment tax on grain sales. And, you can still deduct your input costs.
• Generous income from the Trust, so you get all your money back and take advantage of current high grain prices.

Still not convinced? Even after you’ve received your initial Trust value back in payouts, there will be money left in the Trust to make a charitabe gift to South Dakota State University. It’s a win-win, for you and SDSU.

How It Works

Farmer Jones has a bumper crop of grain, but knows this expensed-out commodity will have a reduced return after taxes. He elects to put a portion of his crop  – worth $240,000 – into a charitable trust with the SDSU Foundation. The Trust owns the crop as it is sold and no taxes are paid. The entire sale value goes into generating income for Farmer Jones. He chooses a 10-year payout that pays him 10 percent of the initial Trust value each year, or $24,000. In 10 years, he gets all his money back, including the $96,000 that would have been lost to taxes.

This deal is full of benefits, and Farmer Jones feels even better knowing there is money left in the Trust to make a charitable gift to SDSU. He decides to start a permanent scholarship in his family’s name for SDSU students. Farmer Jones wins and SDSU wins.

To learn how you can set up a Green Trust through the SDSU Foundation, contact: