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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.
Note: On September 9, 2024, the Iowa Supreme Court adopted new rule 37.6 clarifiying that it is not the unauthorized practice of law for nonattorneys to assist clients in preparing, filing, or determining whether to file, BOI reports.
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.
On January 10, 2024, the Iowa Court of Appeals affirmed the district court’s determination of when to value farmland that was subject to a testamentary purchase option. The doctrine of equitable conversion applies to testamentary purchase options, and equitable title passes when the buyer notifies the sellers they will exercise their option. Further, rent payments made by buyer were credited towards the purchase price when the parties could not agree upon a sales price for over two years.
On February 2nd, 2024, the Iowa Supreme Court affirmed both the Court of Appeals and district court's finding that the injured plaintiff failed to bring forth evidence that the owner of a cow that caused an accident on Interstate 80 was negligent. The court made clear that an animal on the road is no longer prima facie evidence of owner’s negligence.
On January 10, 2024, the Iowa Court of Appeals held that the district court improperly considered extrinsic evidence when interpreting a will. The decedent’s will directed one farm property to be held in a trust and the other farm property be evenly divided between her three children. Based on the testimony of the scrivener of the will, the district court concluded that the testator intended both parcels to be placed in the trust. Because the will was not ambiguous, extrinsic evidence was inadmissible. Thus, the Court of Appeals reversed the district court’s order.
Update: On January 31, 2024, the House passed this bill with a bipartisan vote of 357 to 70. As of February 12, 2024, the future of the bill remains uncertain. It does not appear to be headed for a Senate floor vote any time soon.
Many landowners have land that borders a road. Iowa has specific laws about fences located within the right-of-way dating back to 1858.[i] A landowner can be told to remove a fence located within the highway right-of-way even if the right-of-way is established by easement. Unless the fence is an immediate and dangerous hazard, specific procedures need to be followed by the governmental agency before they can remove a fence and charge the owner for the removal costs.
In two separate lawsuits, several advocacy groups challenged Iowa’s Farm Trespass law and Trespass Surveillance statute. In both cases, a judge from the Southern District of Iowa previously held that the law violated the First Amendment and granted summary judgment in favor of the plaintiffs. Animal Legal Defense Fund v. Reynolds, 591 F.Supp.3d 397 (S.D. Iowa 2022); Animal Legal Defense Fund v. Reynolds, 630 F.Supp.3d 1105 (S.D. Iowa 2022).
The Eighth Circuit Court of Appeals released two separate opinions on January 8, 2024, and reversed the district court’s decisions, ruling that both statutes passed intermediate scrutiny and were, thus, constitutional. The cases are Animal Legal Defense Fund v. Reynolds, No. 22-1830, (8th Cir. Jan. 8, 2024) and Animal Legal Defense Fund v. Reynolds, No. 22-3464 (8th Cir. Jan. 8, 2024).
Note: In 2024, the Iowa Legislature reinstated the capital gain deduction for the sale of breeding, draft, dairy, and sport livestock, retroactively to include the 2023 tax year. Read more about this change here.
On December 21, 2023, IRS announced a Voluntary Disclosure Program (VDP) through which eligible employers may repay 80 percent of the employee retention credit (ERC) to which they were not entitled and avoid civil litigation, penalties, and interest.
In a split decision, the Iowa Court of Appeals affirmed the district court’s determination that a deed executed by a 79-year-old with dementia conveying her half-interest in a hog site to her business partner should be invalidated due to lack of capacity. The district court invalidated the conveyance on two grounds. First, the court found the grantee was in a confidential relationship with the owner, and therefore the conveyance was presumed to be the result of undue influence. Second, the district court found that the owner lacked the mental capacity to execute the deed.
On November 21, 2023, the Iowa Court of Appeals affirmed the district court’s decision to value farmland on the date of distribution, rather than date of death, when determining a residuary beneficiary’s inheritance. Since the residuary clause required equal distribution among five beneficiaries, the value of the farmland given to one beneficiary from the residuary needed to be determined according to the distribution date.
On November 21, 2023, the Iowa Court of Appeals affirmed that Iowa’s partition law did not apply to farmland owned by a trust. Iowa Code chapter 651 contains special provisions for the partition of “heirs property.” Because the farmland was not held in tenancy in common, the farmland did not qualify as “heirs property.” See Iowa Code § 651.1.
On November 8, 2023, the Iowa Court of Appeals reversed the district court’s directed verdict in a surviving spouse’s case against her husband’s estate. The surviving spouse alleged she was entitled to one-half of the price her husband paid to purchase CDs with funds from joint accounts. The court found that the district court improperly applied a tort standard instead of a contract standard to the claim. The court ruled that, on remand, the district court is to consider the intent of the parties when the joint accounts were created.
On October 25, 2023, the Iowa Court of Appeals affirmed the district court’s ruling that a 96-year-old woman had testamentary capacity when she rewrote her will to disown her family and to give all farmland to charity. Although she may have believed she had a life estate in some of the farm ground instead of the fee simple interest she held, the testatrix did not “need to have a perfect understanding of [her] ownership interest” to know the nature and extent of her property. The rewritten will was upheld, and the charity received all farmland.
On November 21, 2023, the Court of Appeals affirmed the district court’s ruling that farmland sold by a life estate holder was proper. The life estate holder was granted a power of sale for the purpose of funding her “health, support, and maintenance.” A remainderman challenged the sale, arguing there was no proof the sale was done in order to fund the life tenant’s welfare. The court of appeals found that the remainderman, not the life tenant, had the burden to prove why the sale was done.
Update: On March 1, 2024, in the case of National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D.