Center for Agricultural Law and Taxation

AMT Exemption (MFJ): $66,250

Passenger Auto Depreciation: $3,060

I.R.C. §179
• $125,000
• Start of phase-out: $500,000

Special Use Valuation:
• Max. reduction: $940,000
• Max. tax savings (45% rate): $423,000
• Formula interest rate (Agribank District): 6.10%

I.R.C. §6166
• First $1,250,000 of taxable estate
• 2% portion - $562,500

       Social Security:  
    • Wage base: $97,500
    • Earnings Limit:
      (Age 62-65): $12,960

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Other Tax Information

April 2008 AFRs:
• 1.85 % (short-term)
• 2.87 % (mid-term)
• 4.40 % (long-term)

May 2008 AFRs:
• 1.64 % (short term)
• 2.74 % (mid-term)
• 4.21 % (long-term)

Interest Rates for Underpayments and Refunds - 2nd quarter 2008 (Rev. Rul 2008-10)

 Non-Corporate taxpayers: 6.0%

Corporate Taxpayers:
- 5% for overpayment
- 6% for underpayment

Large Corporate Underpayments (amount exceeding $10,000): 8%

Large Corporate Overpayments: 3.5%

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IRS Issues Final Regulations That Clarify Rules For Stock and Asset Transfers After a Reorganization

The IRS has amended regulations issued last fall concerning stock and asset transfers following a corporate reorganization…(more)

 

IRS Issues Notice 2008-46 - Guidance on Preparer Penalties

Read Notice 2008-
46 here.

 

IRS Issues Coordinated Issue Paper on Tax Treatment of Bioenergy Program Payments

The IRS has issued a Coordinated Issue Paper that says that Bioenergy Program payments are includible in gross income…(more)

 

IRS Fact Sheet on Like-Kind Exchanges

The IRS has published a summary of the rules for I.R.C. §1031 exchanges (tax-deferred exchanges)...(more)

 

Treasury Releases Tax and Economic Data

On January 4, 2008, the Treasury Department released its most recent data concerning tax revenue and the economy... (here is a summary of the Release)

IRS Fiscal 2007 Audit Data

The IRS has released its fiscal year 2007 data on audit and enforcement. A summary of the data is available here...

IRS Whistleblower Office Exempt From Privacy Act

An interim regulation specifies that the IRS Whistleblower Office will be Exempt from the Privacy Act.  That has implications for subjects of investigation... (more)

IRS Says that Insurance Companies Must Develop Anti-Money Laundering Programs

An IRS Final Rule effective January 11, 2008, subjects insurance companies and dealers in precious metals to anti-money laundering requirements…(more)

 

IRS Proposed Regulations Modifying Circular 230 Practice Standards...(more)

 

IRS 2007 Data Book Released
On March 14, 2008, the IRS released the 2007 IRS Data Book (IRS Pub. 55B), which provides an annual snapshot of IRS activities for Oct. 1, 2006 - Sept. 30, 2007.  The publication includes information about returns filed, tax collections, enforcement, taxpayer assistance, as well as the IRS budget and workforce…(more)

Search CALT

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The Center for Agricultural Law and Taxation at Iowa State University, created by the Iowa Board of Regents in 2006, provides timely, objective information to producers, professionals and agribusinesses concerning the application of important developments in the law (federal and state legal opinions of relevance, as well as critical legislative developments), and is a primary source of professional educational training in agricultural law and taxation.

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CALT Director

Prof. McEowen, is a Leonard Dolezal Professor in Agricultural Law and is the CALT Director. Biographical Sketch Prof. Roger A. McEowen, Director mceowen@iastate.edu 515-294-4076 (O) 515-294-0700 (Fax.)

CALT Staff Attorney

Erin C. Herbold, Staff Attorney eherbold@iastate.edu 515-294-6365 (O) 515-294-0700 (Fax.)

Tiffany Kayser, Program Administrator tlkayser@iastate.edu 515-294-5217

 

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Current Ag Law Court Developments
From Across the Country

Updated May 13, 2008

 

1. Sierra Club, et al. v. Flowers, No. 07-13297, 2008 U.S. App. LEXIS 10059 (11th Cir. May 9, 2008)(plaintiff sued U.S. Army Corps of Engineers (COE) after COE granted CWA permit to plaintiff to extract mining materials from wetlands located between Florida Everglades and Miami; trial court granted permit, but decision vacated and case remanded on basis that trial court did not apply proper APA standard of review to COE’s environmental analysis).

2. Meerland Dairy, LLC, et al. v. Ross Township, et al., No. 07CA0083, 2008 Ohio App. LEXIS 1927 (Ohio Ct. App. May 9, 2008)(township’s amendment to existing zoning code to prohibit “agribusinesses” by declaring that such enterprises are not “agriculture” and classifying them as a conditional use for which a permit must be obtained from the relevant zoning authority not within scope of authority of township trustees under state law; at issue is 2,100-head dairy operation operating on 100 acres).

3. In re Peanut Crop Insurance Litigation, No. 07-1145, 2008 U.S. App. LEXIS 9899 (4 th Cir. May 8, 2008)(case involves action against government concerning indemnification of losses covered by a privately issued, governmentally backed insurance policy; trial court granted summary judgment for farmers but trial court decision vacated and case remanded because (1) policy did not create any contractual obligation for insurers to indemnify the farmers for lost peanuts in 2002 at $.31 quota rate since it was contingent on 2002 farm poundage quota allocations being made to individual farmers, and such allocations were never made; (2) prevention doctrine misapplied insomuch as indemnification of the farmers did not depend on the allocation of quotas by the government; and (3) detrimental reliance not present because government programs are subject to congressional modification and farmers had been notified that there would be revisions to the peanut quota program).

4. Pardee v. Jolly, No. 80066-9, 2008 Wash. LEXIS 466 (Wash. Sup. Ct. May 8, 2008)(suit for specific performance of option to purchase real estate; substantial evidence supported trial court finding that plaintiff timely made final option payment, but evidence did not support trial court’s finding that payment made at same time plaintiff notified defendant of intent to exercise option; thus, plaintiff did not perform according to terms of option contract, but plaintiff may be entitled to equitable grace period; case remanded to trial court for determination whether grace period should be extended and whether specific performance should be ordered).

5. Ralph Naylor Farms, LLC v. Latah County, et al., No. CV07-139-S-EJL, 2008 U.S. Dist. LEXIS 37152 (D. Idaho May 6, 2008)(case involves state inverse condemnation action, federal takings violation and violations of substantive due process and equal protection; plaintiff owns farmland for which he sought to obtain water rights for crop irrigation and facilitation of mineral extraction, but water right and mining applications denied; court dismissed all of plaintiff’s claims).

6. Shoemaker, Exr., et al. v. Gindlesberger, et al., No. 2007-0013, 2008 Ohio LEXIS 1192 (Ohio Sup. Ct. May 7, 2008)(beneficiary of decedent’s will may not maintain negligence action against attorney for preparation of deed that results in increased tax liability to the estate; beneficiary lacked privity with attorney and no special circumstances present which would override privity requirement).

7. Rechtzigel v. Fidelity National Title Insurance Company of New York, No. A07-0645, 2008 Minn. App. LEXIS 220 (Minn. Ct. App. May 6, 2008)(title insurance does not cover monetary losses incurred by insured arising out of bankruptcy of qualified intermediary used in I.R.C. §1031 exchange absent claims asserting threat to marketability of title; thus, unless bankruptcy trustee’s preference action against insured does not implicate marketability of title or other risks specified in policy, title insurer has no duty to defend under policy).

8. Westphal v. Meyer, No. A116959, 2008 Cal. App. LEXIS 678 (Cal. Ct. App. May 6, 2008)(distribution of ranch under decedent’s will not subject to no-contest clause under will; pertinent provision of will did not incorporate no-contest clause by reference).

9. Astleford v. Comr., T.C. Memo. 2008-128 (Substantial discounts for gifts of farmland to FLP granted – 33.9 percent for one year and 35.6 percent for another year (saving taxpayer about $2 million); FLP operated like a business and not taxpayer’s personal bank account; non-tax avoidance reasons for establishing the FLP present).

10. Miller, et al. v. Preble County Commissioners, No. CA2007-04-008, 2008 Ohio App. LEXIS 1807 (Ohio Ct. App. May 5, 2008)(farm property bequeathed to plaintiff from parent’s trust zoned as an ag district, but was not suitable for farming or pasturing livestock; plaintiff’s application for zoning amendment to rezone property as a restricted rural residential district allowing a 41 single-home subdivision denied; plaintiff’s challenge to denial as unconstitutional taking failed because existing comprehensive land use plan designed to protect ag land not arbitrary or unreasonable and did not deny all economically viable uses of the land).

11. Mollica v. Division of Property Valuation and Review, No. 2006-410, 2008 Vt. LEXIS 54 (Vt. Sup. Ct. May 2, 2008)(“Christmas Cottage” on Christmas tree farm used as sales office and warming hut for customers during Christmas season and rented guest house during off-season remains eligible for enrollment in tax abatement program as farm property; property used as “rental property” only during “non-farm” season and still remained actively used in a “farming” operation during the Christmas tree harvesting season).

12. Simko v. Intravaia, et al., No. 06-5369-cv, 2008 U.S. App. LEXIS 9417 (2d Cir. May 1, 2008)( warrantless entry onto plaintiff’s property constituted reasonable search; area (dog shed) searched not within curtilage of plaintiff’s home – shed unattractive to private home activities, accessible with minimal effort and openly exposed to neighboring properties).

13. Obendorf v. Terra Hug Spray Company, Inc., et al., No. 31195/31217, 2008 Ida. LEXIS 82 (Ida. Sup. Ct. May 1, 2008)(asparagus crop loss case; plaintiff awarded $2.435 million in damages, but trial court’s grant of new trial upheld).

14. L & L Holding Co., L.L.C. v. United States, et al., No. 1:05-cv-00794, 2008 U.S. Dist. LEXIS 35229 (W.D. La. Apr. 30, 2008)(sole member of LLC personally liable for payroll taxes; LLC was disregarded entity because owner failed to elect to have it treated as a corporation under the check-the-box regulations).
    
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15. Strome v. Lane County, No. A133090, 2008 Ore. App. LEXIS 576 (Ore. Ct. App. Apr. 30, 2008)(defendant has statutory authority to proceed with legalization of road – process of conducting a survey and issuing order to eliminate doubts as to road’s location and its lawful establishment as a county road; plaintiff’s request for injunction denied).
    
    For archived Ag Law Case Annotations, click here.
    

News & Updates

2008 FARM INCOME TAX SCHOOL DATES

Click here to learn more...

SUMMER 2008 FARM INCOME TAX, ESTATE AND BUSINESS PLANNING SEMINAR

Now accepting registrations.

The Center for Agricultural Law and Taxation is sponsoring a seminar on farm income tax, estate and business planning for June 26 & 27, 2008 in the Black Hills of South Dakota. Click here to learn more...

FARM BILL NEWS

Updated May 11, 2008

Houston, we have a Farm Bill, but it’s a mess...(more)

State Tax Dollars Pay For Cost of Public’s Portion of Improvement Costs, Not Those of Private Landowners

May 10, 2008

Landowners must pay for the cost of public road improvements that benefit their property…(more)

 

Operator of Farmer’s Market Not Tax Exempt

May 5, 2008

The IRS has ruled that an operator of a farmer’s market serves no public interest and, therefore, is not a tax-exempt entity…(more)

 

Iowa Court Decides Another Boundary Case

April 30, 2008

In rural areas, property usage may be more important for establishing property boundaries than a survey…(more)

 

Iowa Court – Landlord Can Be Liable For Injuries Caused By Tenant’s Animals

April 30, 2008

Usually, a landlord is not liable for injuries a tenant’s animals cause.  But, there are exceptions to the rule…(more)

 

THE SPOUSAL QUALIFIED JOINT VENTURE AS A PLANNING TOOL

Updated April 29, 2008

The new QJV election has important planning implications, but it is complex...(more)

 

Congressional Research Service Issues second Report on CRP program

April 25, 2008

The Congressional Research Service has issued the second of its two Reports concerning the CRP program…(more)

 

Single-Member LLC Can Be S Corporation Shareholder

April 22, 2008

IRS has issued three Private Letter Rulings which expand S-corp. ownership to single-member LLCs…(more)

 

I.R.C. Procedures Must Be Followed To Get Refund of Unconstitutional Taxes

April 16, 2008

The Supreme Court has ruled that the I.R.C. trumps the Tucker Act when it comes to getting a refund of illegal taxes…(more)

 

Estate Planning When Debt is Involved

April 11, 2008

Care is needed when a decedent leaves property to heirs that is encumbered by debt…(more)

 

IOWA SUPREME COURT DECIDES NUISANCE CASE

March 28, 2008

The Iowa Supreme Court has ruled that there was insufficient proof to grant an injunction against a mega-sized hog operation based on anticipatory nuisance...(more)

 

DRAINAGE PROJECT WAS REPAIR, NOT IMPROVEMENT; COSTS TO BE BORNE BY ALL LANDOWNERS IN DISTRICT

March 26, 2008

The Iowa Court of Appeals has decided a case involving a proposed drainage project...(more)

 

IOWA CAPITAL GAIN EXCLUSION INAPPLICABLE TO SALE OF PARTNERSHIP INTEREST

March 21, 2008

The Iowa Supreme Court has ruled that the Iowa capital gain exclusion does not apply to the sale of a partnership interest…(more)

 

THE SUBPRIME MESS - DEDUCTING LOSSES

March 20, 2008

An issue arising out of the current problem with subprime loans concerns the deductibility of losses…(more)

 

"FORGIVE US THY DEBTS"...BUT IT STILL MAY BE TAXABLE

March 20, 2008

The tax consequences of discharged debt may depend not only on the debtor’s status, but on the type of debt involved…(more)

 

THE FAMILY-OWNED BUSINESS DEDUCTION AND EQUITY INTERESTS

March 19, 2008

Two recent Tax Court opinions have focused on loans to family members and whether the loans are QFOBIs…(more)

 

BUSH ADMINISTRATION SOFTENS EPA SMOG RULES

March 17, 2008

In an attempt to protect the ethanol industry, the Bush Administration has taken action to soften the impact of the EPA’s new air quality rules….(more)

 

ECONOMIC STIMULUS LEGISLATION

Updated March 5, 2008

The President has signed the Economic Stimulus Act of 2008 into law...(more)

 

NINTH CIRCUIT GETS IT WRONG...AGAIN

March 5, 2008

The U.S. Circuit Court of Appeals for the Ninth Circuit wrongly decided a tax case, but the U.S. Supreme Court unanimously overturned their decision….(more)

 

UNLIKE IOWA, MISSOURI STATUTORY DEFINITION OF "ESTATE" DOES NOT ALLOW SPOUSAL RECOVERY

March 5, 2008

The Missouri Court of Appeals has ruled that the Missouri Department of Social Services can’t recover from the estate of a Medicaid recipient’s surviving spouse….(more)