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December 29, 2017 | Kristine A. Tidgren

As the year concludes, we’re taking some time to review the most significant happenings in agricultural law and taxation in 2017. Some closed chapters on drawn-out litigation or administrative action. Others signal the beginning of much more activity to come. In any event, 2017 did not disappoint in terms of lots to discuss. We review these highlights below, in no particular order.

On April 11, 2017, the United States Court of Appeals for the District of Columbia vacated an EPA final rule that had been in place for nine years.

December 21, 2017 | Kristine A. Tidgren

We told you last April about changes that would come to the Iowa Beginning Farmer Tax Credit program in 2018, absent legislation. Because those legislative changes did not occur, cuts to the program are now being felt by beginning farmers and landlords around Iowa.

December 20, 2017 | Kristine A. Tidgren

Update: President Trump signed H.R.1 into law on December 22, 2017.

December 7, 2017 | Kristine A. Tidgren

The Iowa Court of Appeals recently affirmed a judgment in favor of a borrower, against his banker, for claims of fraudulent misrepresentation and nondisclosure.

December 2, 2017 | Kristine A. Tidgren

Update: The conference committee released its report on December 15, 2017. Congress will vote on this final bill next week. Read our summary of the final bill here.

On October 31, the IRS issued Notice 2017-67, detailing requirements for the qualified small employer health reimbursement arrangements (QSEHRAs) implemented last December by the 21st Century Cure

November 21, 2017 | Kristine A. Tidgren

Update: The House of Representatives passed H.R. 1 on November 16 by a vote of 227-205. Later that day, the Chairman's Mark cleared the Senate Finance Committee by a vote of 14-12. The Senate legislative text has been released here.

Note: These provisions have been significantly modified by the Chairman's second amendment. In particular, the SE tax modifications have all been removed in the Bill that passed out of the Committee. A lower bottom threshold rate was also added for small pass-through businesses.

Many farmers and other self-employed Iowans not eligible for Medicare or Medicaid have few choices when it comes to 2018 health insurance. Last week, due to a lack of federal response, Iowa officials withdrew their proposed Stopgap proposal. They submitted the waiver application in an attempt to prop up Iowa’s individual insurance market in the face of skyrocketing premiums. It was hoped that the measure would stabilize the individual market through "innovative solutions."

October 25, 2017 | Kristine A. Tidgren

A case from the Iowa Court of Appeals today illustrates the operation of the Iowa fence law. If they receive a written request from their neighbor, adjoining landowners are required to contribute half of the cost to maintain a partition fence, even when they don’t want to. A resistant landowner found that out the hard way.

Update: On October 26, 2017, President Trump signed this bill into law.

October 18, 2017 | Kristine A. Tidgren

It was not unexpected. In 2012, the Iowa Legislature passed and Governor Branstad signed Iowa Code § 717A.3A. This legislation, titled Agricultural Production Facility Fraud, has been called Iowa’s “Ag-Gag” law. It’s a law specifically protecting animal production facilities from unauthorized intrusion.

October 17, 2017 | Kristine A. Tidgren

Update: IRS formally withdrew these proposed regulations (REG 163113-02) in FR Doc. 2017-2776, filed October 17, 2017, for publication on October 20, 2017.

The following was orginally published on October 4, 2017:

Everyone interested in the farmer lawsuits against Syngenta knows about reports of a settlement between the disputing parties, achieved in the midst of a jury trial.  But the settling parties aren’t saying what the details of the settlement might be. Following is an effort to gather some available information and hypothesize therefrom what the settlement might mean for individual farmers.   

September 29, 2017 | Kristine A. Tidgren

First there was the Blueprint, then the Bullet Points, and now the “Framework.”

On September 27, the U.S. Tax Court ruled that a Texas farm couple was not liable to pay self-employment tax on rents they received from the S corporation through which they conducted a poultry growing operation. The decision in Martin v. Commissioner, 149 T.C. 12 (Sept.

September 26, 2017 | Kristine A. Tidgren

It was announced on September 26, 2017, that Syngenta agreed to settle claims brought against it by U.S. farmers on account of its allegely premature marketing of Viptera and Duracade GMO corn. These claims include those in the Syngenta MIR 162 Corn Litigation, as well as those in the class action in Minnesota state court.

September 14, 2017 | Kristine A. Tidgren

Update: On October 13, 2017, the EPA announced an agreement with Monsanto, BASF, and Dupont regarding measures to minimize damage from dicamba drift. Read the press release here.

The Iowa Court of Appeals recently affirmed a jury verdict awarding a plaintiff $70,100 after her neighbor built a trail encroaching upon her property. The damages included $50,000 for trespass and loss of lateral support and $20,100 in treble damages for the loss of trees. The jury found the neighbor 75 percent responsible for the damage and his contractor 25 percent responsible.

September 12, 2017 | Kristine A. Tidgren

A recent case out of the tax court ruled that IRS had the power to examine the estate tax return of a predeceased spouse for the purpose of lowering the DSUE (deceased spousal unused exclusion) claimed by the second-to-die spouse’s estate.

August 25, 2017 | Kristine A. Tidgren

IRS’ Office of Chief Counsel recently weighed in on an important question for small partnerships: Are they automatically exempted from the requirement of filing a Form 1065, U.S. Return of Partnership Income, because of Rev. Proc. 84-35, 1984-1 C.B. 509?

Simply put, the answer was, “No.”

Time is running out to avoid automatic renewal of a 2017 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 for another year.

Update: On October 23, 2017, Iowa withdrew its proposal for a stopgap measure.

August 21, 2017 | Kristine A. Tidgren

The Iowa Court of Appeals recently affirmed a Winterset couple's right to ownership of an asphalt driveway and two carports through adverse possession. The case presents a good overview of this powerful, yet sometimes-forgotten legal doctrine.

During a financial downturn, even secured creditors often find themselves with no real recourse. Junior lienholders, in particular, are often left in the cold, even when It seems there is enough collateral to go around.

A recent bankruptcy case illustrates this fact.

The tax code allows an enhanced deduction for the donation of a qualified conservation easement. IRC § 170(b)(1)(E). This deduction is generally limited to 50% of the donor's “contribution base,” which is the taxpayer's adjusted gross income (computed without regard to any net operating loss carryback for the taxable year), less the value of other charitable contributions for the year. IRC § 170(b)(1)(G).

Update: On October 12, 2017, President Trump announced that he would be ending CSR payments effective October 18, 2017.

July 30, 2017 | Kristine A. Tidgren

Preparing tax returns for farmers and ranchers requires specialized knowledge of tax rules and provisions that apply only to those in the business of farming. Individuals, partnerships, and trusts and estates generally report farm income and expenses on Form 1040, Schedule F. Taxpayers use this form to calculate net gain or loss from farming. Gains or losses from the sale of farm assets are reported on Form 4797.

July 25, 2017 | Kristine A. Tidgren

The Iowa Court of Appeals recently decided a case that well illustrates how contractual damages are to be calculated: the non-breaching party is generally entitled to be placed in as good a position as he or she would have occupied had the contract not been breached, nothing more, nothing less.

On June 30, 2017, the Iowa Supreme Court ruled that a 1977 injunction requiring a railway company to rebuild a dike, expired under a 20-year limitations period set forth in Iowa Code § 614.1(6). Consequently, a drainage district’s action seeking to enforce that injunction was dismissed.

The Iowa Court of Appeals recently interpreted a manure easement agreement and agreed that a farmer was entitled to damages for a hog facility’s breach of the agreement. The court did reduce the damages from $70,433.93 to $43,909.99 after finding that the farmer had failed to prove damages for the year he planted soybeans.

With the ink barely dry on the $217.7 million Kansas class verdict, Judge Lungstrum has set forth the plan for trying the additional class claims comprising the Kansas multi-district litigation.

June 29, 2017 | Kristine A. Tidgren

On June 27, 2017, the EPA and the U.S. Army Corps took the first step to rescind and replace the embattled Clean Water Rule, also called "Waters of the United States" or WOTUS.

June 29, 2017 | Kristine A. Tidgren

The decision to lease farm ground comes with many choices: cash rent, crop share, or some combination thereof. Parties to a lease must understand that each option has distinct income tax implications. This fact sheet[1] provides a brief overview of several key tax considerations associated with farmland leases, as they apply to individual landowners.[2] We will post a more comprehensive review of this topic in the next couple of months.

The jury returned a big verdict against Syngenta this morning in the first trial of the massive Syngenta GMO litigation.

Today Senate Republican leaders unveiled a “discussion draft” of their bill to replace many provisions of the Affordable Care Act (ACA). As with the American Health Care Act of 2017 that passed the House on May 4, 2017, the Better Care Reconciliation Act of 2017 (BCRA) is designed to stay within the constraints of the budget reconciliation process. As such, the bill could pass with the approval of only 50 Republican Senators (the Vice President could cast the tie-breaking vote). It also means that the BCRA cannot include provisions that do not change the level of spending, revenues, or the debt limit. In other words, the provisions have to be budget related, and they cannot increase the deficit for any period beyond the budget reconciliation period (usually 10 years). These restrictions greatly limit the extent to which the bill can actually “repeal and replace” the ACA.

This week I had the pleasure of attending the Iowa Bar Annual Meeting. The meeting allows attorneys from around the state to gather in Des Moines, connect with colleagues, and attend some great educational sessions. The Agricultural Law Section of the Bar always provides its own track of programming focused on issues important to rural clients.

Last summer, a federal court found a California landowner liable for violating the Clean Water Act (CWA)[1] because he tilled a 450-acre parcel of his land to plant wheat. He is now preparing for an August 14, 2017, trial. At issue in the trial will be (1) the scope of his CWA violations, (2) the appropriateness of the United States’ requests for restoration and mitigation, and (3) the amount of his civil penalty. 

The U.S. Court of Appeals for the District of Columbia issued a blow to the Federal Aviation Administration (FAA) last week when it vacated the portion of a 2015 FAA Rule requiring registration of model aircraft.

The Iowa Supreme Court recently blessed a class action, paving the way for roughly 4,000 Muscatine residents to potentially obtain damages from a local corn wet milling plant.

May 16, 2017 | Kristine A. Tidgren

“Ademption” isn’t a doctrine often discussed outside of law school classrooms. But a recent case from the Iowa Supreme Court signals that it’s time for a refresher. Steinberg v. Steinberg, 2017 Iowa Sup. LEXIS 44 (April 28, 2017) illustrates the sometimes unexpected impact this doctrine can have on an estate plan.

Iowa SF 505, signed into law on May 9, 2017, authorizes tax-preferred “First-Time Homebuyer Savings Accounts” (FTHSA). These new accounts will be available beginning in tax year 2018.

The Iowa Legislature’s 2017 session drew to a close on April 22, 2017. For agriculture, the session was largely marked by the state’s revenue shortfall, which left tax cuts important to farmers on the table. It also meant the session adjourned for another year without a long-term water quality funding mechanism.

As President Trump’s first 100 days were winding down, his Administration unveiled a purported tax reform proposal designed to stimulate “economic growth” and increase “American jobs.” The proposal was unveiled during a press conference April 26. It was accompanied by a one-page list of bullet points.

Last week, the United States Court of Appeals for the District of Columbia vacated an EPA final rule that had been in place for nine years. The Rule exempted most farms from CERCLA and EPCRA reporting requirements for air releases from animal waste. 

April 18, 2017 | Kristine A. Tidgren

Update: The 2017 legislative session ended without passage of any legislation relating to the Beginning Farmer Tax Credit. As such, the changes detailed in this posting will occur January 1, 2018.

April 11, 2017 | Kristine A. Tidgren

Last December, we told you that the Grain Inspection, Packers and Stockyards Administration (GIPSA), the USDA division tasked with interpreting the Packers and Stockyards Act of 1921, 7 U.S.C.

April 9, 2017 | Kristine A. Tidgren

A jury returned a verdict in favor of the Kansas class plaintiffs in the amount of $217.7 million on June 23, 2017. Read more here.