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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.
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.
Note: This case was reversed on appeal on 11/25/2020.
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. The case was In re DeVries, No.19-00181 (Bankr. N.D. Iowa April 28, 2020).
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. 19-1302 (Iowa 2020)--has caused grain warehouses and lenders to take a closer look at their business practices.
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 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.
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.
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.
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.
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 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.
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 27, 2020, the Iowa Supreme Court issued a ruling finding that two plaintiffs who voluntarily dismissed their agricultural nuisance claims a second time were liable to the defendants for costs and expenses.
The Senate has been discussing provisions contained in what's being called the Coronavirus Aid, Relief, and Economic Security (CARES) Act or Phase 3 Coronavirus legislation. The proposal would include $2 trillion of spending. Full text of the legislation has not been publicly released, but Chairman Grassley from the Senate Finance Committee has released a summary of provisions under consideration.
In a March 22, 2020, Proclamation of Disaster Emergency related to the COVID-19 crisis, the Iowa Governor temporarily suspended foreclosures of residential, commercial, and agricultural real property.
Eligible producers and crop share landlords should finally begin receiving interim payments from the Syngenta settlement this month. On February 28, 2020, the U.S. District Court for the District of Kansas authorized the claims administrator to make interim payments to class members that have:
On March 16, 2020, the Eastern District of North Carolina issued a ruling on another North Carolina nuisance case against the swine integrator, Murphy-Brown. The federal judge ruled North Carolina’s Right to Farm law barred the nuisance claim because the plaintiff failed to bring the claim within one year of the operation’s establishment or fundamental change. The judge also found that the statute of limitations barred the plaintiff’s negligence claim.
On February 24, 2020, IRS issued proposed regulations, REG-100814-19, to address the deductibility of food and beverage expenses in light of the disallowance of entertainment expenses under IRC § 274(a)(1)(A) by the Tax Cuts & Jobs Act (TCJA).
While the number of people employed in the agricultural industry has dropped significantly during the past century, many farms still employ family members, migrant workers, and full-time employees.
On February 21, IRS issued a long-awaited revenue procedure, IRS Rev. Proc. 2020-13, to allow farmers who had elected out of UNICAP prior to the Tax Cuts and Jobs Act to revoke that election if they qualify as a small business taxpayer.
With filing season well underway, IRC §199A (Section 199A) has been generating a lot of questions, particularly with respect to patrons of agricultural and horticultural cooperatives. Below we discuss several common issues.
On February 19, 2020, the Iowa Court of Appeals denied a beneficiary’s request to invalidate a September 2018 court order approving a plan to make property distributions and then terminate a family farm trust
A married couple created an irrevocable trust and placed farmland into the trust. The parents named their three children as beneficiaries. The trust originally provided for terminating distributions once the three children reached fifty-five years of age.
On February 5, 2020, the Iowa Court of Appeals found that trustees of a drainage district improperly annexed and reclassified land into their district. The ruling affirmed the district court's order vacating the annexation.
On January 23, 2020, the Environmental Protection Agency (EPA) and the U.S. Department of the Army signed the final Navigable Waters Protection Rule (NWPR), a rule that defines “waters of the United States” or the jurisdictional scope of the Clean Water Act (CWA).
On January 23, 2020, the Iowa Court of Appeals issued a ruling finding that cash gifts given by the husband’s parents while the couple was married constituted divisible property during their later divorce. The court found that the gifts were made to the couple with the intent to keep the farm in the family.
It’s always good to get answers to unresolved questions, and it’s even better when the answer provides good news. IRS recently provided such an answer in PMTA 2020-01, posted to the IRS website on January 15. In this memo, the Office of Chief Counsel answered an important lingering question we’ve had since 2018:
As we move into 2020, we're dedicating this post to reviewing important agricultural law developments from the past year. Most of these issues continue to evolve, and we look forward to providing updates as they occur. Happy new year!
On December 20, 2019, President Trump signed into law the Further Consolidated Appropriations Act, 2020, HR 1865, part two of a spending bill designed to keep the government running through September 2020.
On December 20, 2019, President Trump signed into law the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act).
On December 18, 2019, a divided panel of the United States Court of Appeals for the Fifth Circuit affirmed a Texas district court’s December 2018, ruling that the individual mandate in the Affordable Care Act is unconstitutional in light of changes made by the Tax Cuts and Jobs Act of 2017 (TCJA). Texas v. U.S., No.
The $1.4 trillion year-end spending package passed by Congress and signed into law on December 20, 2019, contains a number of provisions impacting taxpayers. The package, including the Consolidated Appropriations Act, 2020, H.R.
On November 8, 2019, the Iowa Supreme Court denied the motion to include a tractor driver in a second trial involving a motorcycle collision. The Court found that while there was an error in the verdict form, it did not influence the jury’s decision to exonerate the tractor driver of fault in the accident.
On November 27, 2019, the Iowa Court of Appeals ruled that a farmer who had solicited the services of a harvester was a “debtor” subject to a harvester lien because he was the person for whom the services were rendered.
On November 8, 2019, the Iowa Supreme Court ruled that a restriction of alienation placed on a charitable gift could not be modified. The Court found the restriction did not make the purpose of the gift impracticable, and therefore could not be modified under the Uniform Prudent Management of Institutional Funds Act or the common law doctrine of cy pres.
On November 22, 2019, IRS released TD 9884, finalizing regulations confirming that individuals taking advantage of increased gift and estate tax exclusion amounts in effect from 2018 to 2025 will not be adversely impacted after 2025 when the exclusion amount is scheduled to drop to pre-2018 levels.
On November 6, 2019, the Iowa Court of Appeals affirmed a district court order dismissing a challenge by landowners to a county's condemnation of their property. The county sought to condemn the private land for the purpose of upgrading a dirt road to a Level A road.
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.