Annotations 01/2010

(fact that survey revealed that fence actually on plaintiff's property immaterial because defendant established that fenceline had been treated as boundary between the parties since 1965; defendant replacement of southwest corner of fence which had been removed years earlier so that prior owner could access landlocked parcel does not negate acquiescence to established boundary line).

(upon divorce ex-husband agreed to pay for ex-wife's interest in family farm; ex-husband later sought to renew line of credit and restructure farm's debt to pay ex-wife and bank required ex-wife's agreement to give bank lien priority over ex-wife's; upon ex-wife's refusal trial court granted ex-husband's declaratory order subordinating ex-wife's lien; upon review, court reverses - parties' settlement agreement did not address issue but only contemplated only regular annual renewal of farm's debt to finance farming operations, but not higher level of debt necessary to finance ex-husband's obligations to ex-wife).

(defendant's claim to water from rural upstate Nevada rejected; state water engineer's office did not file application in timely manner). 

(transaction didn't qualify for I.R.C. Sec. 1031 treatment; transaction violated related party rules). 

(QTIP election for estate null and void for federal estate, gift and GSTT purposes; election not necessary to reduce estate tax to zero because no estate tax would have been imposed on assets in residuary trust (a credit shelter trust funded with amount not exceeding decedent’s exclusion amount) regardless of whether election was made; Rev. Proc. 2001-38 applied). 

(defendant's claim to water from rural upstate Nevada rejected; state water engineer's office did not file application in timely manner). 

(decedent's will created a contingent remainder in favor of certain grandchildren; bequest failed, and possibility of reverter passed to two of decedent's sons and a grandson).

(taxpayer's purchase of home from taxpayer's mother is not eligible for first-time homebuyer credit; IRS focused on fact that mother is related person under statute, but ignored the fact that I.R.C. Sec. 36(c)(3) does not prohibit fair market purchases from related parties from being eligible for the credit). 

(out-of-state wine retailers and Texas consumers challenged Texas law which required that only retailers with a physical presence in Texas could deliver to Texas consumers; statute upheld as constitutional). 

(petition not allowed to claim girlfriend's children as his dependents, even though the children lived with him because girlfriend eligible to claim children as dependents).

(plaintiff incorporated under Iowa non-profit act for purpose of advocating for a change in the law that would allow sexual activities between children and adults not qualified charity under I.R.C. Sec. 501(c)(3); director previously convicted as sexually violent predator under Iowa law (before IA Supreme Court opinion of April 2009)).

(DPAD for cooperative's patronage-sourced income does not offset nonpatronage income; according to Farm Service Cooperative v. Comr., 619 F.2d 718 (8th Cir. 1980), cooperatives cannot use patronage losses to offset nonpatronage gains).

(debtor owned 99 percent interest in limited partnership at time of bankruptcy filing and case revolved around what rights the bankruptcy trustee had with respect to the debtor's partnership interest; while limited partnership created as estate planning tool for debtor's father, partnership business of owning, managing and developing undeveloped land still ongoing, general partner did not act improperly, and judicial dissolution of partnership not allowed; however, trustee's withdrawal notice and buy/sell offer were valid and enforceable under partnership agreement). 

(court affirms trial court decision that plaintiff's signing of liability release form resulting in plaintiff assuming all risks of skiing or riding at snow facility operated by defendant; liability release does not violate public policy (under CO law) and had clear terms; plaintiff's claim that the release purported to cover reckless conduct not raised at trial and cannot be raised on appeal).

(based on cooperative's bylaws and operating agreement, grain payments to members and other patrons eligible to share in patronage dividends are PURPIMs and for purposes of computing DPAD, co-ops QPAI and taxable income should be computed without regard to any deduction for any grain payments to members and patrons eligible to share in patronage dividends). 

(court affirms trial court's determination that plaintiff had established existence of public prescriptive easement for ingress and egress over defendant's property by clear, convincing and satisfactory evidence).

(surviving spouse protections of ERISA do not apply to IRAs, even if funds in the IRA came from an ERISA plan; facts involved decedent who had ERISA plan assets rolled over into IRA and then remarried; IRA beneficiaries were decedent's children who, upon decedent's death claimed entitlement to IRA by reason of beneficiary designation while surviving spouse claimed proceeds via being surviving spouse and that funds came from ERISA plan and were subject to spousal protections; court determined that children entitled to funds).  

(case involves various agreements and transactions with respect to inherited property among family members and, in particular, whether there was authority to sell the property). 

(plaintiff’s writs of attachment to defendant's real estate do not have priority over defendant's lender who received a judgment lien; in Iowa, pre-judgment attachment not recognized as a tort action).

(various procedural claims filed in Chapter 12 case).

(permits calendar-year taxpayers to treat charitable contributions of cash made after January 11, 2010, and before March 1, 2010, as contributions made for 2009 tax year if such contributions were for the purpose of providing relief to victims in areas affected by the 1/12/10 Haiti earthquake; bill also clarifies recordkeeping requirement for such contributions and specifies that a telephone bill satisfies the recordkeeping requirement if it shows the name of the donee organization, and date and amount of contribution). Note: Haiti contributions are not deductible on the Iowa 2009 return.

(taxpayer previously owned a home within three years of purchase of second home and is, thus, ineligible for first-time homebuyer tax credit; taxpayer purchased home before 11/7/09 and is, therefore, ineligible for long-term homeowner tax credit).

(payments that a governmental entity makes as compensation as part of a settlement of a wrongful death action to victims' survivors are not included in gross income under I.R.C. Sec. 104(a)(2)). 

(Chapter 12 case converted to Chapter 11; debtor was raising hogs under production contract and question arose as to whether voluntary and unilateral termination of contract released debtor from arbitration clauses; arbitration properly refused). 

(bankruptcy court order directing plaintiff to sign a prepared, sworn statement is not final appealable order for purposes of appellate review by district court).

(court invalidates on First Amendment grounds portion of Bipartisan Campaign Reform Act of 2002 which limits corporate political spending as chilling political speech; ruling allows individuals of limited means to collectively counterbalance political speech of well financed interests).

(affirming Tax Court decision, court holds that Tax Court lacked jurisdiction to hear case concerning former spouse who once filed joint return and now, no longer married, and meets certain requirements to claim relief from joint and several liability for tax deficiency because deficiency stemmed from a partnership interest that is subject of an ongoing partnership proceeding; no remedy available until partnership proceedings have finished).

(petitioners property satisfies statutory requirements for ag land classification; petitioners used property to board horses and raise pasture grass for horses).

(petitioners, married couple, not able to deduct travel expenses because the husband failed to satisfy the I.R.C. Sec. 162(a)(2) test of being away from home while pursuing work; expenses not ordinary and necessary).

(I.R.C. Sec. 469 does not prevent a taxpayer from carrying back NOLs that accrued in post C corporation years; consequently, the NOLs can be used to offset the taxpayer's portfolio income earned in years when it was a C corporation). 

(case involves decedent's 1955 holographic will (decedent died in 1965) which devised 158 acres to each of the decedent's three sons and stated that the three sons were to "share and share alike production royalty and unproduction royalty"; court reverse trial court and holds that decedent devised each son a separate tract of land together with all mineral rights and interests beneath the respective tract, except for royalties and shut-in royalties paid or to be paid on any well on any of the land devised under the will (which are to be shared under the will)).

(case involves trustee's action to recover preferential transfers; debtor was in business of buying seed corn and seed beans from farmers). 

(in accordance with the Department of Defense Appropriations Act of December 19, 2009, IRS announces the extension through February 2010 of the eligibility period for certain unemployed persons to qualify for a 65 percent subsidy on COBRA health insurance premiums; IRS also announces that the original nine-month subsidy period has been extended to 15 months for the newly eligible individuals and for those already receiving the subsidy).

(QTIP election void for purposes of I.R.C. Secs. 2044(a), 2056(b)(7), 2519(a) and 2652 where election not necessary to reduce estate tax liability to zero, based on values as finally determined for federal estate tax purposes). 

(decedent's will did not clearly indicate that the state anti-lapse statute was not to apply; anti-lapse statute applicable).

(case involves dispute over conveyance of farm real estate; plaintiff failed to prove existence of oral contract to leave property to plaintiff by will at death by clear, positive and convincing evidence, and imposition of constructive trust not justified; unclear what "farming operation" meant).

(defendant properly convicted of animal cruelty under state law; plaintiff failed to provide horse with necessary emergency veterinary treatment - by time veterinarian arrived, plaintiff had known that horse had been down for more than 30 hours and had not put the horse down nor called a veterinarian). 

(breach of contract case involving purchase of fertilizer from plaintiff (an Iowa company) which plaintiff delivered but defendant (a Wisconsin business) refused to pick-up and pay for; defendant had sufficient contact with Iowa to be sued in Iowa).

(petitioner liable for 10 percent additional tax for $50,000 premature distribution from employer's qualified retirement plan; distribution did not qualify under exception for distributions used to pay for acquisition costs of first-time home purchase because funds withdrawn from employer-sponsored qualified retirement pension plan instead of from an IRA).

(divorced petitioner not entitled to either dependency exemption deduction or child tax credit for daughter; decree allowed petitioner to claim dependency exemption and child tax credit in even-numbered years if current on child support obligation; petitioner did not attach Form 8332 or similar document to return, but only attached copy of decree; child not petitioner's qualifying child under I.R.C. Sec. 152(c) and is, therefore, not entitled to child tax credit).

(IRS again expresses its belief that the first time homebuyer credit is not available for acquisitions from related parties (in whatever form); taxpayer cannot claim first-time homebuyer credit attributable to amount of mortgage assumed on mother's home; no analysis of the actual statutory language provided which does not bar arms-length, fair market value purchases from related parties).

(defendant found to have violated contract with plaintiff by developing GMO soybeans created with plaintiff's technology; defendant had sold new line of biotech seeds (called Optimum GAT) which added defendant's gene to older line of plaintiff's Roundup Ready corn and soybean plants the defendant developed under license with plaintiff; court ruling held that licensing agreement between the parties clearly prohibited defendant from engaging in such conduct).

(defendant (USDA) liable for $149,383.55 in physical and non-economic damages plaintiff sustained when plaintiff's horse knocked her to the ground; horse spooked by defendant's aerial shoot of coyotes on portion on plaintiff's property without her consent or prior notice; manner in which aerial shoot conducted violated applicable policy and regulations).

(court upholds lower court's order which bars Massachusetts from enforcing a state wine distribution law because the law has an unconstitutional effect of favoring smaller in-state wineries while burdening larger out-of-state competitors).

(case involves purchase of residential property that had rodent damage and basement seepage that buyers claimed were not disclosed on disclosure statement; buyer failed to seek relief under appropriate state statute for seller's failure to complete disclosure statement with respect to septic system and seller's silence regarding septic system did not constitute grounds for relief under state statute; seller did disclose that sump pump would run frequently during heavy rains and did not contradict statement in disclosure statement that basement did not have seepage).

(Chapter 12 plan denied confirmation based on feasibility).

(court upheld lower court's refusal to apply equitable subrogation where plaintiff sought to have its lien on property declared senior to existing IRS liens; subrogation would prejudice the IRS and plaintiff may have recourse against the loan recipient and title examiner).

(taxpayer does not qualify for long-term homebuyer credit for home that ex-spouse purchased because taxpayer did not live in the home for the required five years; taxpayer may still qualify for first-time homebuyer credit if taxpayer did not have ownership interest in home in prior three years).

(plaintiff required to return overpayment of tobacco loss payments; plaintiff had reason to know via constructive knowledge of regulations that FSA miscalculated amount of crop loss payments to which plaintiff entitled).

(plaintiff, manufacturer of and seller of products made from mint oil, entered into futures contracts with defendants for purchase of 60,000 pounds of peppermint oil at $14/lb. in crop years 2008 and 2009; defendants failed to produce any mint oil in either 2008 or 2009 and plaintiff purchased mint oil from other farmers at more than double the contract price and sued defendants for breach of contract, anticipatory repudiation and intentional interference with contractual relations; plaintiff not entitled to JML because factual issues remain relating to the necessity of plaintiff's purported need to cover from particular farms that it did due to alleged unique characteristics of mint oil and differences based on various growing regions in Nevada; plaintiff's motion for partial summary judgment likewise denied).