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Congress has been working on new COVID-19 relief provisions (Phase IV), but July ended with no agreement in sight.
Despite the recess for COVID-19, the Iowa Legislature passed many laws this term, many of them effective July 1, 2020. Below is summary of the new Iowa laws impacting agricultural producers and rural landowners.
On July 22, 2020, the Iowa Court of Appeals issued an opinion in a case seeking to set aside fraudulent transfers of a farm and three parcels of real estate. The court affirmed the district court’s order setting aside the transfer of the three parcels of land, but reversed the decision to set aside the transfer of the farm. The court ruled that the statute of limitations prevented the court from setting aside the otherwise fraudulent transfer of the farm.
On July 22, 2020, the Iowa Court of Appeals issued an opinion regarding a petition to foreclose a mechanic’s lien and claim for breach of contract. After a working relationship soured, a contractor attempted to foreclose a mechanic’s lien and claimed he was still owed compensation for services performed. Because there was no written contract or accounting of payments, the court relied on the district court’s findings and affirmed the ruling dismissing the mechanic’s lien and finding that the homeowners reasonably compensated the contractor for his services.
On July 22, 2020, the Iowa Court of Appeals issued an opinion affirming a Board of Adjustment’s grant of an area variance. The Board properly considered all evidence and accurately applied Iowa law when granting a variance to prevent unnecessary hardship.
On July 22, 2020, the Iowa Court of Appeals issued an opinion regarding a trustee’s request for fees and expenses incurred in administering a trust. The court affirmed the lower court’s ruling finding that the trustee was only entitled to a small portion of the claimed fees and expenses because she had not fulfilled her obligations to the trust or the beneficiary—likely in order to preserve trust assets for herself.
Called the 2020 Omnibus Bill, HF 2641 makes a number of changes to Iowa tax law. Signed into law by the Governor on June 29, 2020, the primary intent of the bill was to streamline the administration of Iowa’s tax laws and coordinate their interaction with federal law.
On July 22, 2020, the Iowa Court of Appeals issued an opinion reversing a district court decision interpreting a family trust. The district court had ruled that the income beneficiary was entitled to a distribution of the gross income of the trust, but her children argued that she was only entitled to the net income. The court agreed, ruling that a settlement agreement and the Iowa Uniform Principal and Income Act required a net income distribution.
On June 23, 2020, IRS issued Notice 2020-51, providing guidance for the waiver of 2020 required minimum distributions (RMD) made possible by the CARES Act. The guidance also provides sample plan amendments.
Update: On July 4, 2020, President Trump signed S.4116 into law. This new law allows new PPP loans to be made through August 8, 2020. The law does not allow businesses that have already obtained a loan to receive a second one.
A person commits food operation trespass by entering or remaining on the property of a food operation without the consent of a person who has real or apparent authority to allow the person to enter or remain on the property.
On June 19, 2020, the Iowa Supreme Court ruled that the Iowa Department of Revenue rationally interpreted Iowa Code § 422.7(21)(a) to prevent a typical cash rental landlord from taking the Iowa capital gain deduction. Christensen v. Iowa Department of Revenue, No. 19-0261 (Iowa Sup. Ct.
On Friday, June 19, IRS issued Notice 2020-50, expanding the definition of “qualified individuals” eligible for coronavirus-related distributions from eligible retirement accounts. The Notice also provides detailed guidance for coronavirus-related distributions and expanded plan loans made available by the CARES Act.
On June 12, 2020, the Iowa Supreme Court issued an opinion concerning the right of first refusal to purchase farmland. The plaintiffs did not seek specific performance, but instead sought monetary damages for an alleged breach of contract. The Court found that the statute of limitations for real estate transactions did not apply and no other grounds warranted granting summary judgment on the issue.
On June 16, 2020, the Center for Agricultural Law & Taxation hosted a crop marketing seminar presented by Dr. Steve Johnson, Extension Farm Management Specialist. In this webinar, Steve reviewed both old & new crop supply/demand & cash price projections, highlighted crop marketing strategies & tools and featured written crop marketing plans for a 1,000 acre row-crop example farm. The webinar also included an extensive Q & A period.
In this one-hour event, farm management specialist Steve Johnson and the Center's Kristine Tidgren provided an update to farmland owners on key farm program and legal developments. Kristine discussed the status of dicamba-based herbicides and reviewed the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDLs). Steve discussed Coronavirus Food Assistance Program (CFAP) payments, 2020 crop budgets and Iowa State University's 2020 Farmland Cash Rental Rate Survey.
On June 8, 2020, IRS and Treasury issued proposed regulations (REG-109755-19) that will (once they become final) open the door for those involved with health care sharing ministries and direct primary care arrangements to realize tax savings for the cost of these programs.
Update: On June 19, the Ninth Circuit denied the plaintiff's emergency motion to enforce the vacature and hold EPA in contempt.
Last month, the attorneys general for eleven different states petitioned the U.S. Department of Justice (DOJ) to investigate potential anticompetitive practices in the cattle industry. The letter to the DOJ expressed concern over the concentration of meat packers in the cattle industry as well as the difference between the low live cattle price and the healthy price of beef products.
On May 29, 2020, Katie Kramer and Justin Muir, agricultural program specialists from the Iowa USDA-FSA office, and ISU agricultural economist Chad Hart joined us for a webinar on the Coronavirus Food Assistance Program. The panel reviewed eligibility information and the application process for the new program and answered a number of producer questions.
On May 13, 2020, the Iowa Court of Appeals issued an opinion concerning the award of attorney fees in a farm lease dispute. The court found the contractual attorney-fee clause of a farm lease allowed attorney fees to be awarded to the prevailing party, but this amount did not include the fees incurred after a settlement offer.
Update: Late on May 13, Treasury extended the deadline for repaying a PPP loan without review from May 14 to May 18.
It’s official. The President signed H.R. 266, the Paycheck Protection Program and Health Care Enhancement Act, into law today. This law provides another opportunity for some small businesses, including agricultural producers, to get in line for a potential loan to help them through the next few months.
Late on April 30, 2020, IRS issued Notice 2020-32, stating that no deduction is allowed for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan under the Paycheck Protection Program (PPP).
On April 29, 2020, the Iowa Court of Appeals affirmed a district court’s ruling finding a classification of property to be residential rather than agricultural. The court found the primary use of the property was not agricultural and the property owner did not have a genuine intention to profit.
On April 29, 2020, the Iowa Court of Appeals issued an opinion concerning an insurance company’s alleged breach of contract with a hog farmer. The court concluded that the farmer’s equipment was damaged by a power surge, but that the electrical system for the buildings was not harmed by a power surge. The court also modified the loss-of-income award to be within policy limits.
The question before the U.S. Supreme Court was whether the Clean Water Act requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, in this case, groundwater. Many had hoped the Court’s answer to this question would clarify longtime ambiguity under the CWA. But given the complexity of the issue, that was not to be.
The Iowa Supreme Court recently issued a decision in a key case involving competing claims by a secured lender and a grain elevator over the costs of storing and drying the grain. The April 17, 2020, case--MidWestOne Bank v. Heartland Co-op, No.
A bankruptcy court recently ruled in a Chapter 12 case that federal and state taxing authorities do not have the right to offset a refund with tax debt stripped of its priority by 11 U.S.C. § 1232. This was a court’s first opportunity to rule on this question since the passage of the Family Farmer Bankruptcy Clarification Act of 2017.
On April 15, 2020, the Iowa Court of Appeals affirmed a defendants’ motion for quiet title on the establishment of a new boundary line. The court found the two neighbors treated a row of culverts as the boundary line for a period of more than ten years, thereby creating a boundary by acquiescence.
On April 15, 2020, the Iowa Court of Appeals issued an opinion in a breach of contract case brought by a subcontractor against a business owner and his LLC to collect for work done during a building remodel. The court ruled that the district court incorrectly pierced the veil of the LLC and imposed personal liability on the LLC owner.
On April 15, 2020, the Iowa Court of Appeals issued a ruling finding a boundary by acquiescence and denying damages for a trespass claim. Because previous adjoining landowners treated a cement seam as the boundary line for more than ten years, they created a new boundary through the doctrine of boundary by acquiescence. Although determining that a new boundary was created, the court ruled that the prevailing landowner presented insufficient evidence of trespass damages.
On April 15, 2020, the Iowa Court of Appeals reversed a jury verdict in favor of plaintiffs in a breach of contract action against their contractor. The court ruled that the plaintiffs did not complete the required terms and conditions under the contract and that further performance by the contractor was excused.
President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law on March 27, 2020. This economic stimulus package included provisions providing financial relief to individuals, businesses, as well as the agricultural industry. The Act provides nearly $49 billion to producers, nutrition assistance programs, and rural development programs under USDA jurisdiction. While we are still waiting for details on how these programs will be implemented, this post provides a general overview of the new USDA programs.
The CARES Act created three temporary unemployment programs: the Federal Pandemic Unemployment Compensation (FPUC) program, the Pandemic Emergency Unemployment Compensation (PEUC) program, and the Pandemic Unemployment Assistance (PUA) program. These programs are 100% federally funded through a voluntary agreement between individual states and the Department of Labor. With federal guidance issued by the Department, we have more information on how these programs are to be implemented.
Update: On June 29, IRS stated via FAQ that taxpayers will have until July 15, 2020, to file a Form 1139 or Form 1045 that otherwise would be due June 30. This is because of the general extension relief provided by Notice 2020-26.
Farmers, like other business owners, may deduct “ordinary and necessary expenses paid . . . in carrying on any trade or business.” IRC § 162. In agriculture, these ordinary and necessary expenses include car and truck expenses, fertilizer, seed, rent, insurance, fuel, and other costs of operating a farm. Schedule F itemizes many of these expenses in Part II. Those properly deductible expenses not separately listed on the Form are reported on line 32. Following is a summary of several key expense deductions for farmers.
On March 18, 2020, the Iowa Court of Appeals issued a ruling regarding a boundary-line dispute. The Court of Appeals affirmed the district court’s denial of the plaintiff’s petition to quiet title because the plaintiff failed to meet his burden for either adverse possession or boundary by acquiescence.
On March 20, 2020, the USDA approved the Iowa Department of Agriculture and Land Stewardship’s hemp plan for the State of Iowa. IDALS will publish the official notice that the USDA accepted Iowa’s state plan in the Iowa Administrative Bulletin on April 8th. This means that farmers are much closer to being able to grow hemp in Iowa during the 2020 season. It does remain illegal to grow, possess, buy or sell hemp in Iowa until official notice is published in the Iowa Administrative Bulletin (April 8) AND the grower has received a license from IDALS.
On March 13, 2020, President Trump announced all student loan interest would be suspended due to the Covid-19 outbreak in the United States. On March 27, 2020, the President signed the CARES Act into law. Intended as an economic stimulus package, this law has several important changes for federal student loan borrowers.
The Center for Agricultural Law and Taxation does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. The Center's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.