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On July 9, 2021, President Biden issued an Executive Order on Promoting Competition in the American Economy. The order targets consolidation across many different industries and contains several provisions specifically concerning agricultural markets.

On July 21, 2021, the Iowa Court of Appeals affirmed a jury verdict in favor of a daughter in a will contest between two siblings. The dispute arose because the deceased mother had intentionally omitted her son from her will, leaving her farmland to her daughter alone.

Background

After her husband passed away, Gladys Troendale updated her will, dividing her estate equally between her son and daughter, Steven and Michele. Gladys had health issues and suffered a stroke in 2002. She relied on her daughter, who had already moved back to the family farm, to assist her.

July 1, 2021 | Kristine A. Tidgren

On June 30, 2021, IRS issued Rev. Proc. 2021-14, which details special elections and revocations available to taxpayers with farming loss net operating losses (NOLs) in 2018, 2019, and 2020.

As of July 1, 2021, Florida has a new Right to Farm Act (RTFA). On April 30, 2021, Governor DeSantis of Florida signed SB 88 into law, amending Florida’s RTFA in several ways. See Fla. Stat. § 823.14.

June 29, 2021 | Kristine A. Tidgren

On Friday, June 25, the United States Supreme Court issued an opinion determining the availability of an extension to the small refinery[i] hardship exemption within the renewable fuel standards program (RFS).

On June 23, 2021, the United States Supreme Court held that a 46-year-old California regulation allowing union organizers to access agricultural employers’ property to solicit support for unionization was an uncompensated per se physical taking in violation of the the Fifth and Fourteenth Amendments of the United States Constitution. The 6-3 ruling reversed a Ninth Circuit decision finding that the regulation did not constitute a permanent physical taking.

On June 18, 2021, the Iowa Supreme Court released an opinion involving the proposed buyout of two shareholders of a family farm corporation. After the two plaintiffs petitioned for judicial dissolution, the corporation sought to buy their shares at fair market value. The Iowa Supreme Court found that the transaction costs for asset liquidation should be included in the valuation. Conversely, because this was an S corporation, the Court ruled that potential capital gains liability would create a second tax and thus should be excluded.

On June 18, the Iowa Supreme Court—in a 4-3 decision—dismissed a water quality lawsuit filed against the State of Iowa[i] by two social justice groups, Iowa Citizens for Community Improvement and Food and Water Watch.

On June 16, 2021 the Iowa Court of Appeals issued a ruling involving ownership of a family farm. The plaintiffs’ grandparents attempted to execute a transfer-on-death (TOD) deed conveying the farmland upon their deaths to their three children. Because TOD deeds are not valid in Iowa, the Court of Appeals affirmed that the land must pass through the grantor’s estate.

On June 16, 2021, the Iowa Court of Appeals issued a ruling involving a proposed $3,678,000 drainage district improvement. As stated by the court, “This case falls into the category of be careful what you ask for.”

On June 16, 2021, the Iowa Court of Appeals issued a ruling involving a trustee’s request for reimbursement from his mother’s estate and the family trust. Because there was no evidence of an understanding to repay the expenditures, the court affirmed the denial of reimbursement.

June 16, 2021 | Kitt Tovar Jensen

On June 16, 2021, the Iowa Court of Appeals released an opinion regarding rights to use a driveway easement. The court clarified that without evidence of intent, there can be no public dedication. While the landowner in this case did allow some public use of an easement, this was insufficient to show that he intended to publicly dedicate it.

On June 16, 2021, the Iowa Court of Appeals issued a ruling involving the reclassification of drainage benefits and an assessment for repairs. The court ruled that the board of trustees improperly considered non-drainage benefits to shift some of the costs of repair to a railroad company to prevent painfully large assessments against some agricultural landowners.

On June 16, 2021, the Iowa Court of Appeals released an opinion involving two sisters’ request for attorney fees incurred during their father’s guardianship and conservatorship proceedings. The guardians repeatedly objected to the sisters’ participation while the district court found that the sisters did not have standing to intervene. Therefore, the Court of Appeals affirmed the denial of their request for fees. The case provides a helpful overview of when attorney fees are properly awarded in a guardianship or conservatorship proceeding.

On June 11, 2021, the Iowa Supreme Court released an opinion involving a claim of interference with an inheritance. The year before she passed away, the decedent changed the beneficiaries of her will. On appeal, the Supreme Court affirmed that the new beneficiaries did not have the required knowledge to meet the elements of tortious interference with an inheritance.

June 2, 2021 | Kristine A. Tidgren

On May 28, 2021, the Treasury Department released the "Green Book," a description of revenue proposals within President Biden’s fiscal year 2022 budget.

On May 12, 2021, the Iowa Court of Appeals affirmed a summary judgment in favor of the executor in a will contest filed by the decedent’s son. After the son failed to respond to numerous requests for admission during discovery, the district court deemed the unanswered questions admitted and entered judgment for the executor. In affirming the judgment, the Court of Appeals found that there was no evidence of “insane delusions” or undue influence and that the executor would be prejudiced if the court allowed the son to withdraw his answers.

On May 28, 2021, the Iowa Supreme Court released an opinion involving a farm lease dispute between a landlord and tenant. The tenant brought this lawsuit claiming breach of contract and sought attorney fees under the terms of the lease. Because the tenant had given the landlord a reasonable opportunity to pay the debt, the Supreme Court affirmed that the tenant, as the prevailing party, was entitled to attorney fees. The Court ruled, however, that the tenant was not entitled to any fees accruing after rejecting a settlement offer from the landlord.

On May 14, 2021, the Iowa Supreme Court released an opinion regarding a family dispute over an LLC. The district court dissolved the LLC after disagreement broke out between several members. The Supreme Court reversed the dissolution, finding that the district court resolved the issues creating deadlock and that the LLC could fulfill its intended purpose.  

UPDATE: On June 23, a judge from the Middle District of Florida also granted a preliminary injunction halting the debt relief program. Wynn v. Vilsack, 2021 WL 2580678 (M.D. Fla. June 23, 2021).

On May 21, 2021, the Iowa Supreme Court determined that a district court had improperly reformed farm leases entered into between a farmer’s conservator and his family members. The decision affirmed an earlier order from the Court of Appeals that had overturned the district court’s modification. On review, the Supreme Court agreed that the conservator had the authority to enter into the leases on behalf of the ward and that the conservator did not breach its fiduciary duty.

The Center for Agricultural and Rural Development recently posted this policy brief discussing the possible implications of the Growing Climate Solutions Act of 2021 on the carbon market for agriculture:

The First Legal Step for an Agricultural Carbon Market is in the Growing Climate Solutions Act of 2021

Update: On June 16, 2021, Governor Reynolds signed this bill into law.

After several years of litigation flowing from dicamba drift damage to cotton, soybeans, and other crops,[i] Monsanto (owned by parent company Bayer) agreed to enter into a Soybean Producers Master Settlement Agreement.

On April 30, 2021, the Iowa Supreme Court released an opinion regarding the property tax assessment of a feed manufacturing facility. At issue was whether two stand-alone corn silos and overhead ingredient bins in the feed mill met the definition of machinery under Iowa Code § 427A.1(1)(e). The Court concluded that only the overhead ingredient bins were an integral part of the manufacturing process qualifying as tax-exempt machinery.

On April 30, 2021, the Iowa Supreme Court released an opinion on the predeath transfer of farmland. In an amended petition, the administrator of the estate requested that the court set aside several allegedly fraudulent real estate transfers. Because the claim in the amended pleading did not arise out of the same transaction as the original pleading, the petition to set aside the conveyance of farmland was barred by the statute of limitations.

On May 12, 2021, the Iowa Court of Appeals issued an opinion concerning the distribution of trust property and a testamentary option to purchase farmland. Because the testator clearly showed an intent to devise the trust property equally between his three sons, the court affirmed the district court’s construction of the will.

On May 12, 2021, the Iowa Court of Appeals released an opinion concerning the foreclosure of a mechanic’s lien. Because the contractor substantially performed the contract, the court affirmed the foreclosure. 

May 5, 2021 | Kristine A. Tidgren

As President Biden wrapped up his first 100 days, he rolled out the last of three proposals forming the backbone of his tax and spending policies, the “Build Back Better” plan. With his COVID-19 relief plan—the American Rescue Plan—signed into law, his focus now turns to the latter two proposals, a physical infrastructure plan and a “human infrastructure” plan.

On April 30, 2021, the Iowa Supreme Court entered an opinion on the testate transfer of farmland. The testator devised farmland with a 20-year sale restriction provision. The Supreme Court affirmed that the restriction created an impermissible restraint on alienation and was void.

On April 28, 2021, the Iowa Court of Appeals issued a ruling on a claim for quiet title of certain real estate. Because Iowa laws on real estate transfers are designed to promote stability, the statute of limitations barred the plaintiffs claim and the court affirmed the district court’s ruling.

April 27, 2021 | Kitt Tovar Jensen & Guido van der Hoeven

In this video, CALT staff discuss common terminology used in the estate planning and farm succession planning process. 

On March 11, 2021, President Biden signed the $1.9 trillion American Rescue Plan Act (ARPA) into law. The ARPA set aside approximately $10.4 billion for agriculture and nutrition programs to address food supply chain disruptions, provide funding for rural areas, and increase nutrition assistance. Among its relief provisions, the new law provides specific loan payment assistance to “socially disadvantaged farmer or ranchers.”

On April 14, 2021, the Iowa Court of Appeals issued a ruling on a foreclosure of agricultural real estate. After the borrower defaulted on two mortgages, the creditor petitioned to foreclose on the properties. Because the creditor gave proper notice 12 months prior to the default, the borrower no longer had the right to cure and the court affirmed the foreclosure decree.

On April 14, 2021, the Iowa Court of Appeals issued a ruling in a dispute over a conservatorship. Two sisters separately incurred substantial attorney fees in a court battle over the proposed conservatorship of their mother. The court found that the district court did not abuse its discretion in determining that the mother, as the proposed protected person, would pay for her daughter’s attorney fees.

On April 14, 2021, the Iowa Court of Appeals issued a ruling regarding an interference with an easement. The plaintiff had a written easement over the neighboring property to access 40 acres of farmland. Because the defendant substantially interfered with the plaintiff’s easement rights, the court affirmed a permanent injunction entered by the lower court.

April 9, 2021 | Kitt Tovar Jensen

The 2018 Farm Bill required the USDA to create a regulatory framework for the production of hemp in the United States. States and Tribes can choose to operate under the Federal plan or submit their own plan for approval. Federal regulations require producers to obtain a license from the USDA, State, or Tribal hemp program which has jurisdiction over the intended growing location.

April 3, 2021 | Guido van der Hoeven

As farmers and ranchers approach retirement (however defined) generating an income stream to meet lifestyle needs comes into focus. An obvious resource is renting the land, either using a cash rent or crop-share model.  What about the machinery and equipment?  The farmer or rancher can decide to have an equipment sale which generates a lump-sum payment, less sales costs, but this will trigger IRC § 1245 recapture resulting in a sizable tax bill.  A second sales strategy is to sell the equipment in a piecemeal fashion over time to manage the tax bill resulting from IRC § 1245 recapture.

On March 29, 2021, the Iowa Department of Revenue announced a filing and payment extension for individual taxpayers, from April 30, 2021, to June 1, 2021.  In the same notice, IDOR provided instructions for reporting unemployment compensation on 2020 returns.

March 26, 2021 | Kristine A. Tidgren

Update: Sign-up for this program opened April 5. https://www.farmers.gov/cfap/apply

March 25, 2021 | Kristine A. Tidgren

By a vote of 92-7, the Senate today passed HR 1799, the PPP Extension Act of 2021. The House had passed this bill on March 16, 2021, by a vote of 415 to 13.

March 17, 2021 | Kitt Tovar Jensen

On March 17, 2021, the Iowa Court of Appeals issued an opinion regarding a will dispute. The will, among other things, created an option for certain beneficiaries to obtain ownership of the farmland subject to various terms and restrictions. Because the will gave the probate court authority to determine the reasonableness of the terms for the transfer of farmland, the court ruled that the probate court properly exercised its authority in resolving the beneficiaries’ disputes.

March 24, 2021 | Kitt Tovar Jensen and Guido van der Hoeven

In this introduction to Farm Succession Planning video, CALT Staff discuss ten common mistakes to avoid during the estate planning process. 

March 18, 2021 | Kristine A. Tidgren

It’s been difficult enough to keep up with federal tax changes this year, let alone worry about how Iowa is treating these changes. Confusion has been complicated by the fact that many software companies have not adjusted their products to comply with Iowa law.

On March 17, 2021, IRS issued the following news release:

March 17, 2021 | Kitt Tovar Jensen

On March 17, 2021, the Iowa Court of Appeals issued another opinion in a family dispute regarding the management and ownership of a trust. The court affirmed the trial court’s judgment finding that the father had breached a trust established for the benefit of his daughter.

President Biden signed the American Rescue Plan Act of 2021 (ARPA), H.R. 1319, into law on March 11, 2021. The $1.9 trillion package includes money for states and localities, schools, socially disadvantaged farmers, public health, small business relief, and much more.

Note: This post has been updated to include new guidance and forms published March 12 and March 18 at the bottom.

 

March 3, 2021 | Kristine A. Tidgren

Between the pandemic, a trade war, and assorted natural disasters, agricultural producers, like most other businesses, faced a difficult 2020. As many farmers file 2020 income tax returns, they and their tax professionals are sorting through unusual sources of income, analyzing whether new COVID-19 tax benefits apply, and determining how to report these items on their income tax returns.

On March 2, 2021, the United States Court of Appeals for the Tenth Circuit determined that the district court abused its discretion when it granted the State of Colorado’s request to stay the effective date of the Navigable Waters Protection Rule in Colorado. The district court had granted the preliminary injunction, pending a determination on the merits of Colorado’s case challenging the legality of the rule.

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