Don't Cut the Corners: Biblical Stewardship Inspires Tax-Smart Giving for Farmers and Ranchers

By James R. Angell, Estate Planning Attorney, Kennedy Berkley, Salina, Kansas

In the heart of the plains, where amber waves of grain stretch to the horizon, the act of farming is more than a livelihood—it's a calling rooted in stewardship of the land God has provided. This principle echoes in Leviticus 19:9-10 (NIV): "When you reap the harvest of your land, do not reap to the very edges of your field or gather the gleanings of your harvest. Leave them for the poor and the foreigner residing among you. I am the Lord your God." For ancient farmers, this meant intentionally leaving margins—the "corners"—of their fields unharvested, allowing the vulnerable to glean and thrive. Today, this biblical mandate for generosity resonates deeply in agricultural communities, inspiring modern farmers and ranchers to apply the same mindset to charitable giving.

While this stewardship ethic naturally lends itself to supporting churches and Christian charities that aid the needy or spread the gospel, it also extends to local community colleges or four-year institutions that have long bolstered rural economies and trained the next generation of producers. These local institutions have been lifelines for ag communities, offering research, extension services, and education that directly impact farm viability. Giving back to them isn't just philanthropy—it's investing in the future of agriculture, ensuring the land continues to provide for all.

As an estate planning attorney with decades of experience advising rural clients on succession, taxes, and legacy building, I've helped producers navigate charitable giving in ways that honor their values while maximizing tax benefits. Farmers and ranchers are stewards at heart. They understand the importance of leaving something behind for others, whether that's for family, community, or causes that matter. With the right strategies, you can give generously without disrupting your operations or burdening heirs—and even reduce your taxable estate in the process.

Grain Gifting: A Simple Start to Leaving 'Gleanings'

One of the most accessible ways to embody this stewardship is through gifts of grain or commodities. Picture a central Kansas corn grower, standing atop his combine at harvest’s peak, the hum of the machine blending with the rustle of golden stalks under a wide October sky. Instead of selling all of his crop, his family is called to transfer ownership of unsold grain directly to a charity—perhaps its a church outreach program or a local community college’s ag scholarship fund. His family has provided stewardship and left the “corners” as the good book describes.

This gift of grain avoids being taxed as ordinary income, sidestepping federal income taxes, self-employment taxes, and state income taxes, while still allowing the farm to deduct production input costs—such as seed, fertilizer, fuel, and labor—as standard business expenses on Schedule F. While selling the grain outright might bring more immediate cash, for those with a heart for giving, this approach blends meaningful impact with tax relief, channeling your harvest to causes close to home without touching your cash reserves.

This strategy also provides a charitable deduction for the grain’s fair market value—up to 60% of your adjusted gross income, with the option to carry over excess deductions for up to five years. It’s akin to leaving those biblical gleanings for others, but with modern tax advantages. Many local institutions, from community colleges to four-year universities, offer programs to streamline these gifts, directing funds to scholarships, ag research, or extension services that strengthen rural communities. Churches and charities also welcome such gifts to support missions or global farming initiatives.

I recently worked with a client from Russell who gifted a portion of his wheat crop to a nearby community college’s ag scholarship fund. “It felt like I was leaving the corners of my field for the next generation of farmers,” he told me. “I could’ve sold the grain and put a little more cash in my pocket, but this way I supported students learning to farm while easing my tax burden.”

Charitable Remainder Unitrusts (CRUTs): Income Now, Legacy Later

For those with appreciated assets like land or machinery, Charitable Remainder Unitrusts (CRUTs) provide a way to generate retirement income while designating the remainder for charity. You fund the trust, it sells the assets tax-free, and you receive annual payouts based on a percentage of the trust's value.

The beauty is avoiding capital gains taxes—up to 20% federal plus 3.8% net investment income tax—and claiming a deduction for the remainder's value. With farmland values climbing 10-15% annually in Kansas, this can create substantial income streams. The remainder could endow a program at a local four-year institution, supporting ag innovation that benefits rural towns, or go to a Christian charity.

We recently advised a retiring rancher who used a CRUT to fund both a church missions fund and a local community foundation. This mindset of stewardship applies equally to sacred and secular causes. Local institutions have been pivotal in our ag communities. Giving back there preserves that impact.

Life Estates: Retain Control, Gift the Future

Another powerful tool is the reserved life estate, where you deed property to a charity but keep lifetime rights to use and farm it. This yields an immediate tax deduction for the remainder interest (often 40-60% of the value, based on actuarial tables) and reduces your taxable estate—particularly valuable if your assets push you toward estate tax thresholds. It's ideal for ensuring land stays productive while supporting causes close to home.

Additional Tools: Tailoring Your Giving with More Options

Beyond these, there are numerous other estate planning tools that allow farmers and ranchers to customize their charitable giving while reaping tax benefits. For instance, conservation easements let you donate development rights on your land to a qualified land trust preserving it for agricultural use forever. This can provide significant income tax deductions (up to 50% of AGI for qualified farmers, with 15-year carryovers) and reduce estate taxes by lowering the property's value—ideal for those wanting to protect family ranches from urban sprawl while supporting conservation charities.

Charitable Lead Trusts (CLTs) are another option: You fund a trust that pays income to a charity for a set period, after which the assets pass to heirs. This generates upfront deductions and can minimize gift or estate taxes, making it great for multi-generational farms supporting churches or local ag education programs.

Outright gifts of appreciated property, such as farm equipment or stock, avoid capital gains taxes entirely, with deductions at fair market value. Or consider bargain sales, where you sell assets to a charity below market value—the difference counts as a deductible gift, blending income needs with philanthropy.

These tools, like Qualified Charitable Distributions (QCDs) from IRAs (up to $105,000 tax- free for those over 701⁄2) or Donor-Advised Funds for flexible giving, offer ways to support churches for community ministries, Christian organizations for family farm preservation, or local institutions that have shaped ag livelihoods.

Whether it's tithing to your church or endowing a scholarship at a nearby community college, the goal is the same: Use what you've been given to bless others. Charitable gifts can help manage estate taxes by reducing your estate's value, making it a smart move regardless of the tax landscape.

In a world of uncertain markets and weather, this biblical-inspired giving reminds us that true abundance comes from open hands. For those ready to leave their "corners," we are here to guide you. Contact is at Kennedy Berkley for personalized advice, and let your harvest extend far beyond the field.

James R. Angell is managing partner at Kennedy Berkley in Salina, Kansas, specializing in agricultural estate planning. Reach him at jangell@kenberk.com or visit kenberk.com for more resources.