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With the initial filing deadlines behind us for filing our federal income tax returns, I turn today to a common question we receive at the Center. Has anything changed with respect to reporting CRP income? Briefly, the answer is "no," but a summary of the current status of this issue may be useful.
Background
When the IRS issued guidance for the employee retention credit (ERC), it instructed taxpayers to reduce the wage expense on their business tax returns at the time they claimed the credit. See IRS Notice 2021-20.
On December 21, 2024, Congress enacted the American Relief Act of 2025, P.L. 118-158, which averted a government shutdown and extended the Farm Bill for the second time in two years. The Act also allocated $10 billion in funding to provide economic assistance to farmers because of expected economic losses incurred in growing 2024 commodities.
To help you stay abreast of the ever-changing status of the Corporate Transparency Act's beneficial ownership information reporting requirements, we're providing a timeline. Stay tuned for further updates!
March 21, 2025
In recent months, I have received many questions from farmers and their advisors about the so-called “residual fertility” deduction. Although farmers have been taking a limited deduction for the residual fertilizer purchased along with their farmland for many years, a push to extend and expand this practice beyond the traditional approach has been growing.
The new year is well underway! At the Beginning Farmer Center we are looking forward to new activities and programming, the first of which is our upcoming 2025 Farm Transitions Conference on February 6th and 7th.
On January 15, 2025, USDA issued long-awaited technical guidance to allow farmers to quantify the greenhouse gas emissions associated with corn, soybeans, and sorghum grown using climate smart agriculture (CSA) practices.
Update! On January 23, 2025, the US Supreme Court granted the application to stay the injunction while the case proceeds through its appeal. Stay tuned.
The 2018 Farm Bill (Agricultural Improvement Act of 2018) has been temporarily revived. On December 21, 2024, Congress enacted the American Relief Act of 2025, P.L. 118-158, which averted a government shutdown and extended the Farm Bill for the second time in two years.
12/31/2024 Update:
On October 30, 2024, the Iowa Court of Appeals affirmed the district court’s dismissal of claims against a son who was financial agent for his dad when he received a gift of eighty acres from his father. The other children argued the son had unduly influenced the father into gifting the land, but the record showed the father highly valued continuing the family farm and had remained in control of his own decisions. The court found the son had rebutted the presumption undue influence.
On October 30, 2024, the Iowa Court of Appeals affirmed the district court’s determination that Iowa’s liability shield for domesticated animal activity is not an affirmative defense. Instead, it sets a standard of care against which to assess negligence for activities that qualify as domesticated animal activities. The court also found that herding ponies is a domesticated animal activity for purposes of the liability shield found in Iowa Code § 673.2.
On October 16, 2024, the Iowa Court of Appeals affirmed the district court’s decision to dismiss a trust beneficiary’s claim that the bank trustee breached its duty when failing to advise the beneficiary about the power of appointment granted to him in the trust. The court found the duty to inform merely required the trustee to provide a copy of the trust and notify the beneficiary of the right to request more information, not to explain the significance of provisions found within the trust.
Recent hurricanes have caused widespread destruction to farms throughout the southeast resulting in damage and destruction of assets and loss of income. Several USDA programs, including disaster programs and crop insurance, are available to impacted producers.
On September 30, 2024, the 2018 Farm Bill expired, again. This is not unique. Last September, the bill also expired, and Congress enacted a one-year extension on November 19, 2023.
On September 18, 2024, the Iowa Court of Appeals affirmed the summary judgment granted by the Business Specialty Court to Farm Credit Services in an action brought by farmers challenging the enforceability of a debt restructuring agreement. The farmers argued they entered into the agreement under economic duress because the agreement was made during planting season, which left them in a “vulnerable position.” The appellate court agreed that the undisputed facts established that the farmers voluntarily entered into the agreement.
Time is running out to avoid automatic renewal of a 2024 farm lease in Iowa. Whether you’re a landlord or a tenant, Iowa law requires that you formally notify the other party by September 1 if you don’t wish to continue the current lease under its existing terms and conditions for another year.
On July 24, 2024, the Iowa Court of Appeals affirmed the district court’s denial of a promissory estoppel claim by a long-serving farm worker. In 2020, the farmer died without a will. The worker claimed the farmer promised to transfer the farm to him at the farmer’s death in return for the worker’s effort over the years. Upon review, the court found the evidence supporting the existence of a promise was sparse and therefore the worker did not meet the burden of proof required.
The tax rules associated with implementing conservation and CSAF practices depend on the type of activity, the method of funding, and the involvement of the taxpayer. Most government program payments generate taxable income for producers. Farmers may presently deduct some related expenses as ordinary and necessary expenses associated with a trade or business. The cost of some conservation-related assets are recovered through depreciation deductions. Expenditures for non-depreciable improvements must be generally added to the basis of the land. I.R.C.
Because of tax credits created by the Inflation Reduction Act (IRA) for clean fuel production, some farmers may in the near future receive a higher price for selling crops to renewable fuel producers (i.e.
Read this post for the latest developments, and stay tuned!
On June 5, 2024, the Iowa Court of Appeals affirmed the district court’s order appointing one of three brothers as the successor trustee of their mother’s trust. The case was one in a series arising from a family dispute involving the brothers. In this case, the court of appeals rejected the argument of one brother that the trustee brother had a conflict of interest and was thus unqualified to serve as trustee.
On June 21, 2024, the Iowa Supreme Court upheld a $4.75 award to a dairy for nuisance due to stray electrical voltage from a natural gas pipeline. On appeal, the natural gas company argued the plaintiffs were required to show the company’s actions were negligent. The company also challenged the $1.25 million portion of the award assessed for noneconomic damages. The Court rejected both arguments.
This presentation is perfect for land owners, township trustees, farm tenants, and anyone interested in understanding Iowa's fence laws.
In this session, you'll learn:
On June 5, 2024, the Iowa Court of Appeals affirmed the district court’s decision to uphold the Linn County Board of Supervisor’s decision to rezone agricultural land as an agricultural district with a renewable energy overlay district. The plaintiffs argued the rezoning was improper on multiple grounds. They argued it was inconsistent with Linn County’s comprehensive plan, violated Iowa’s prohibition of zoning on agricultural lands, and was an illegal taking of their natural drainage easement.
On May 31, 2024, the Iowa Supreme Court overturned a district court’s determination that a previously dismissed party was an “indispensable party” and therefore required to remain a party until the end of the lawsuit. The court found that Iowa Code § 633.312, which requires all interested parties to be joined in a will contest, was satisfied because the dismissed party was initially a party and consented to the dismissal. The court found both the statute and court rules do not require the party to remain involved until the end of trial.
Since the U.S. Supreme Court decision in Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), courts have often been required to defer to “permissible” agency interpretations of the statutes those agencies administer—even when a reviewing court reads the statute differently. In a landmark decision issued June 28, 2024, the U.S.
On August 28, 2024, the Iowa Utilities Commission granted Summit Carbon Solutions, LLC, a hazardous liquid pipeline permit. The company cannot begin construction until the authorities in South Dakota and North Dakota grant their approval for the project.
On May 22, 2024, the Iowa Court of Appeals affirmed post-trial rulings from the district court in a shareholder’s unsuccessful legal malpractice action. The shareholder brought the action against the law firm representing him during mediation and a trial relating to a requested dissolution and buy out of his siblings’ shares in a family-farm corporation.
In a case of first impression in Iowa, the Iowa Supreme Court today ruled that common ownership of adjacent parcels eradicates otherwise existing claims of boundary by acquiescence by subsequent purchasers. The case is Sundance Land Company, LLC v. Remmark, No. 22-0848, (Iowa Sup. Ct.
Many Iowans have been impacted by recent severe storms. This post summarizes relevant notices and relief issued by IRS, FEMA, and the Iowa Department of Revenue.
On Thursday, June 6, 2024, the Iowa Department of Revenue announced that the revised 2023 Form IA 100A (Iowa Capital Gain Deduction – Cattle, Horses, or Breeding Livestock) is ready to file.
On June 4, 2024, the U.S. Supreme Court issued a unanimous opinion holding that a corporation’s obligation to use life insurance proceeds to redeem a decedent’s shares did not offset the value of the life insurance when valuing the shares for estate tax purposes. [Connelly v. U.S., No. No. 23–146 (U.S. Sup. Ct.
On May 22, 2024, the Iowa Court of Appeals affirmed the district court’s valuation of a family farm corporation’s shares. The plaintiffs initially sued claiming minority shareholder oppression, but amended their petition to seek a corporate dissolution eight months later. The defendants argued the valuation date should be the day the original petition was filed, not the day before the amended petition. They also argued the fair value should include discounts for hypothetical tax consequences and transaction costs.
Background
The detailed facts of this case are set forth in our summary of the Court of Appeals decision. Albert Cruz and Janice Geerdes have known each other since the early 1990’s. In 2004, Cruz and Geerdes became partners of Blue Acres Pork, a hog operation, when Geerdes deeded 9.64 acres (hereafter, “hog parcel”) to herself and Cruz as tenants-in-common.
The Iowa Legislature had a busy 2024 session, passing 187 bills through both the House and the Senate. This post reviews the enrolled bills of most interest to agricultural producers and landowners. Several of these bills still await the Governor’s signature. Most are effective July 1, 2024.
On April 24, 2024, the Iowa Court of Appeals affirmed the district court’s ruling that the trustee could not buy farm real estate as part of the winding-up process of the trust. Although the trustee had obtained an appraisal and had given the other beneficiaries first chance at purchasing the farmland, the court of appeals found there was no adequate reason for allowing the proposed self-dealing.
On April 19, 2024, the Iowa Supreme Court reversed a decision from the Iowa Court of Appeals and ruled that shareholders of a family farm corporation did not prove their breach of fiduciary duty claims against their father and brother. Hora v. Hora, No. 22-0259 (Iowa S. Ct.
On April 19, 2024, the Iowa Supreme Court affirmed the dismissal of plaintiffs’ claims for punitive damages against the administrators of the drainage districts and the engineering firm providing services to the drainage districts. The members of the Kossuth County Board of Supervisors administered the three drainage districts at issue in this case. The plaintiffs abandoned their breach of duty claims on appeal and argued they were entitled to pursue a stand-alone punitive damages claim.
On March 27, 2024, the Iowa Court of Appeals affirmed the district court’s determination to vacate a drainage district annexation. Both courts found the required engineer’s annexation study did not meet the statutory burden to specify the material benefits to the proposed annexed land. The report had concluded that all lands in the watershed would be benefited by the improvement due to more reliable drainage, but the court found that the report needed to show that the soil quality would be improved. Since the report failed to do so, the annexation was vacated.
On March 27th, 2024, the Iowa Court of Appeals affirmed the district court’s ruling that a trust could not be terminated. The beneficiaries of the trust had petitioned the court for termination, arguing there were significant negative tax consequences that could be avoided by early termination since a large portion of the principal was the grantor’s Individual Retirement Account (IRA).
On January 24, 2024, the Iowa Court of Appeals, in a split decision, overturned a district court’s ruling that an Iowa Limited Liability Company (LLC) lacked standing to sue one of its members when it did not obtain defendant member’s consent to sue.
On March 6, 2024, the Iowa Court of Appeals found that a family settlement agreement was invalid. The agreement was executed prior to the testator’s death and two of the signers had predeceased the testator. The court found that a family settlement agreement is not binding on the heirs of the deceased beneficiaries. It also found that beneficiaries must wait until their interest vests and cannot prematurely disclaim an inheritance by entering into a family settlement agreement.
Iowa has a new rule when it comes to boundary by acquiescence and property transferred from a trust. In a rare reversal of precedent, the Iowa Supreme Court overruled Heer v. Thola, 613 N.W.2d 658 (Iowa 2000) (en banc) to find that boundary by acquiescence claims are not cut off by the one-year limitations period for bringing claims arising from the transfer of property by a trustee.
On January 24, 2024, the Iowa Court of Appeals ruled that a district court improperly determined that the heirs of deceased beneficiaries were to receive the deceased beneficiaries’ shares of a testamentary trust. Ultimately the court held that “lapse” language in the will showed a clear intent that only named beneficiaries alive at the time of the trust’s termination were entitled to a a share of the trust.
As March 1 approaches, we review the estimated tax rules for farmers.
On January 24, 2024, the Iowa Court of Appeals affirmed a district court’s partition order. The judge ordered a hybrid partition, where a portion of the partitioned property would be sold, and the other portion given in-kind to one owner. The one receiving an in-kind share would also owe owelty payments to the other owners. The land was heirs property under the 2018 Iowa partition law, and the plaintiffs argued a hybrid partition was not allowed for heirs property.
Recently the Court of Appeals released two opinions that discussed adjudication on the merits with agricultural related cases. The first case addressed a dismissal that resulted from failure to mediate prior to filing a foreclosure suit. The second case addressed a plaintiff re-filing a suit once an expert on water drainage was found after summary judgment was granted in a previously filed case. Both cases explain established court doctrine regarding refiling cases that were previously brought before a district court judge.