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Potential tax changes dominated most 2021 tax discussions. Proposals such as the American Families Plan sought to significantly increase the capital gains tax rate and require recognition of capital gain at death or at gift. A later House of Representatives proposal sought to increase the capital gains tax rate and cut the estate and gift tax exemption in half in 2022.
IRS announced January 10 that it will begin accepting and processing 2021 tax year returns for individuals beginning January 24, 2022.
On December 3, 2021, the Iowa Supreme Court affirmed that the assignee of foreclosed agricultural property did not meet the statutory requirements to redeem the farmland. A debtor may redeem property by paying the sale price plus costs and interest within a one-year period of the sale. See Iowa Code § 628.13. Because the assignee did not pay the full price within the redemption period, the Supreme Court affirmed that the redemption was untimely.
Like 2020 before it, 2021 was no ordinary year. As we leave the year behind, we review key tax considerations arising from 2021’s unique circumstances and look ahead to the 2022 tax filing season. This post reviews the tax treatment of common COVID-19 benefits distributed in 2021. With high crop yields and robust commodity prices, many farmers closed 2021 with more income than they expected.
With high crop yields and robust commodity prices, many farmers are closing 2021 with more income than they expected. Likewise, input costs for 2022 are on track to reach record highs. In light of these trends, many farmers may have sought to even out income by deferring income from 2021 into 2022, by prepaying expenses in 2021, or by purchasing depreciable property.
Many farmers regularly and generously give to their churches or other charitable organizations. This article reviews the rules for gifting a raised commodity directly to the charity, instead of selling the grain or livestock and then donating the proceeds. This strategy can allow some farmers to recognize both income tax and self-employment tax savings.
We frequently receive questions about depreciating and expensing business vehicles. This post provides a brief summary of the general rules for 2021.
On December 15, 2021, the Iowa Court of Appeals released an opinion involving a dispute over the sale of a railroad-tie-removal business. Without several key terms included in the contract, the court was left to determine the parties’ intent. Because the Seller did not provide his “best efforts” to assist the Buyer retain and expand the business, the Seller breached his consulting obligations. Therefore, the Court of Appeals affirmed that the Buyer was not obligated to pay the Seller the outstanding consulting fees.
Rural landowners are sometimes asked to enter into an agreement to allow a developer to run a pipeline or power lines across their property. These are important decisions with permanent consequences. Landowners considering entering into such a contract should seek legal counsel to carefully review and negotiate the terms.
It is impossible to overstate the impact of Dr. Neil Harl on the field of agricultural law and taxation. It is also impossible to put into words the legacy he left with his many students and the agricultural community at large
On October 6, 2021, the Iowa Court of Appeals affirmed an order from the district court, dividing a 50-acre parcel between two brothers pursuant to a partition in kind action. Robert Tolle sought a partition in kind of the parcel he owned as a tenant in common with his brother, Rickey. Instead of adopting either brothers’ division proposals, the district court accepted the appointed referee’s plan. The Court of Appeals affirmed, holding that the district court did not err when considering “what would be most equitable and practicable.”
On October 6, 2021, the Iowa Court of Appeals affirmed the denial of Zachary Tew’s workers’ compensation claim. Tew filed a petition for worker’s compensation benefits claiming that he was injured during his employment as an egg stacker. The Court of Appeals affirmed the denial of Tew’s request finding that he did not present credible testimony that his employment caused his injury.
In this case, the Iowa Court of Appeals reminds us that “contracts mean what they say.” On October 6, 2021, the Court of Appeals reversed an order from the district court finding that a hotel owner breached a contract with a construction company. Because the contractor failed to follow the required steps to change the scope of the project, the Court of Appeals reversed the district court’s order, finding that the hotel owner did not breach the contract.
H-2A workers have legal rights that H-2A employers are required to respect. These rights include being provided free transportation and housing, being provided with all guarantees outlined in the work contract approved by the Department of Labor, and being free from discrimination for reasons related to their immigration status or citizenship.
In this case, farm borrowers once again challenged court orders surrounding their farm foreclosure. In November 2017, the district court granted summary judgment and a foreclosure decree in favor of the bank. On February 3, 2021, the Iowa Court of Appeals denied the farm borrowers’ request to set aside the sheriff’s sale of their property because any “irregularities” in the sale were due to the plaintiffs’ own actions.
There are three common ways to transfer assets: transferring the asset at death (inheriting), gifting the asset, or selling the asset. Ultimately, each way will result in a new owner, but the new owner’s basis in the asset will be different, depending on the technique.
Business entities can be helpful tools for transitioning a farm business to new or additional owners. When examining the consequences of having the farm in a business entity, default state law guides all transactions, unless the business’ operating agreement/articles of organization/partnership agreement or buy-sell agreement say otherwise.
H-2A must follow a number regulations designed to protect workers’ rights and ensure compliance with U.S. immigration laws. This publication provides a basic overview of these rules.
H-2A employers must provide housing to certain employees.
H-2A employers must provide certain transportation for H-2A workers. This article discusses the requirements employers must follow.
On August 4, 2021, Summit Carbon Solutions, LLC, initiated the legal process to build a proposed 710-mile carbon sequestration pipeline through 30 Iowa counties by filing a request for public informational meetings with the Iowa Utilities Board.
The H-2A temporary agricultural program allows agricultural employers facing a labor shortage to hire workers from foreign countries. Workers under the program are guaranteed the means of travel, food, and housing from their employers.
As many taxpayers are working to finalize extended returns, many in Congress are working to finalize language for tax reform legislation. Here we provide a brief update on the status of tax reform and what we may expect in the next several weeks.
For tax years beginning in 2021, the American Rescue Plan Act (ARPA) significantly expanded the child tax credit. It also implemented advance child tax credit payments, and a possibility that taxpayers may face a repayment obligation if the advance payments are too high. Taxpayers facing a potential repayment may wish to unenroll from these advance payments.
The American Rescue Plan Act of 2021 (ARPA), Pub L. No. 117-2, significantly enhanced the availability of the Affordable Care Act’s (ACA) premium tax credit (PTC) to make healthcare acquired on the ACA’s Health Insurance Marketplace more affordable for 2020, 2021, and 2022. These changes could mean significant savings to taxpayers purchasing healthcare coverage on the Marketplace.
The employee retention credit (ERC) has been an important tax credit for many employers in 2020 and 2021. Although a fairly complicated credit, the ERC can be very beneficial to many employers. Recent guidance has clarified several longstanding questions. Here, we provide a brief overview of the credit, as well as a summary of the new guidance.
On August 16, 2021, the Ninth Circuit brought closure to long-standing wetlands litigation between Idaho property owners and the Environmental Protection Agency (EPA). Despite the EPA’s intent to no longer pursue enforcement action, the court held that the case was not moot and that the property consisted of wetlands under the “significant nexus” test.
It’s that time of the year to again think about Iowa’s farm lease auto-renewal law. Tenants or landlords who do not wish to continue a farm lease into 2022 should be aware that their 2021 farm lease will automatically renew under the same terms and conditions if neither party takes action by or before September 1.
On August 10, 2021, the United States Court of Appeals for the Eighth Circuit considered the constitutionality of Iowa’s 2012 “Agricultural Production Facility Fraud” law (2012 law), sometimes called an “ag-gag” law.
Update: On March 31, 2023, the Eastern District of Arkansas granted one of the defendant’s Rule 12(b)(6) motion to dismiss for failure to state a claim. The district court concluded that the First Amendment applies to state action, not private actors such as the defendant. Additionally, the Eighth Circuit’s Article III determination did not equate to state action.
On August 19, 2021, the United States Court of Appeals for the Tenth Circuit affirmed that three subsections of the Kansas Farm Animal and Field Crop and Research Facilities Protection Act (the Act) were unconstitutional. The Act provides criminal sanctions for using fraud or deception to obtain consent to engage in various activities at an animal facility with the intent to damage the facility.
On August 4, 2021, the Iowa Court of Appeals released an opinion affirming a district court’s finding that a private zoo was a public nuisance.
In this study conducted in conjunction with the Center for Agricultural and Rural Development, Kristine Tidgren and Wendong Zhang analyze Iowa farmland data, including estimated basis and fair market value, to estimate the impact of the proposed tax provisions in the American Families Plan on Iowa farmland owners during lifetime and at death and gift.
We have been seeing renewed interest and activity associated with a market for carbon credits, in particular credits created through new land management and conservation practices farmers implement on their land. Last week, we participated in a webinar providing information on this emerging topic.
On August 18, 2021, the Iowa Court of Appeals determined the priority of three creditors’ claims against a real estate developer. After the developer defaulted on several mortgages, the bank initiated this foreclosure action claiming to have priority over the mechanic’s liens filed by two subcontractors on the property. Because the subcontractors began work on the properties before the bank recorded the mortgages, the Court of Appeals affirmed that the bank had a junior interest under Iowa Code § 572.18(1).
The 1986 Immigration Reform and Control Act designated a category for the employment of foreign agricultural workers called H-2A. The modern H-2A Nonimmigrant Visa Program allows agricultural employers to request the temporary admission of foreign workers when anticipating a shortage in the domestic labor pool.
On August 4, 2021, the Iowa Court of Appeals reversed a district court’s entry of summary judgment in favor of farmers seeking title to property through boundary by acquiescence. The court held that a reasonable fact finder could infer from the record that the farmers did not believe they owned the land.
On July 28, 2021, the United States Court of Appeals for the Ninth Circuit affirmed the dismissal of lawsuit challenging a California law, finding that even though the complaint plausibly alleged that “Proposition 12 will have dramatic upstream effects and require pervasive changes to the pork production industry nationwide,” it did not state a violation of the dormant Commerce Clause under existing precedent.
On August 4, 2021, the Iowa Court of Appeals addressed the validity of a petition filed by landowners to elect private trustees, rather than the county supervisors, to manage their drainage district. This is the second case in two months involving a dispute within this drainage district. This time, the court ruled that the landowners’ petition was valid and that they were entitled to hold their requested election.
On July 26, 2021, the District Court of Hawaii considered whether the County of Maui must obtain a National Pollution Discharge Elimination System (NPDES) permit for releasing pollutants into injection wells a half a mile from the ocean. On remand, this district court, using factors set forth by the Supreme Court, held that the circumstances surrounding how the Lahaina Wastewater Reclamation Facility (LWRF) conveyed pollutants through groundwater was the “functional equivalent of a discharge.”
On July 21, 2021, the Iowa Court of Appeals released an opinion involving a CEO’s agreement to repay stolen funds. In reversing a district court decision, the Court of Appeals determined that the beneficiary of a spendthrift trust cannot make an irrevocable transfer of his beneficial interest. Although the CEO’s irrevocable transfer of his interest in the trust was unenforceable, the court ruled that the CEO breached a restitution agreement with the company. As such, the company could initiate collections.
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.
On July 21, 2021, the Iowa Court of Appeals issued an opinion involving a subcontractor’s attempt to foreclose on a mechanic’s lien. The district court dismissed the case, finding that the subcontractor had not property provided written notice to the owners. Ruling that the district court went beyond the pleadings to make that determination, the Court of Appeals reversed the case and remanded for further proceedings.
On July 21, 2021, the Iowa Court of Appeals determined that a Township had acquired ownership of a cemetery, as well as an access easement, through adverse possession.
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.
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 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.