August 2017

August 2017


When Small Partnerships Don't File a Partnership Return

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.”

The conclusion of the CCA 201733013 was not a surprise, especially in light of the 2015 case of Battle Flat, LLC v. United States, and Internal Revenue Manual procedures detailing the requirements for applying Rev. Proc. 84-35. Yet, the advice very clearly sets forth the IRS position on this matter, which is very important to many agricultural partnerships. It also raises the question of how this provision will be applied in 2018, after new partnership audit rules are implemented.

Continue reading here.


$39,000 Premium for Couple Earning $67,000 per Year? Iowa Submits Stopgap Proposal

Earlier this month, we updated you on the crisis facing the Iowa individual healthcare insurance market and Iowa's proposal to keep the market afloat. The August 7 blogpost provides a detailed review of the Iowa Stopgap Measure designed to restructure the Iowa individual market. On August 21, 2017, Iowa submitted its formal Waiver Application to the U.S. Treasury Department and the U.S. Department of Health and Human Services to implement the Iowa Stopgap Measure in 2018. It is now up to those agencies to grant or deny the request. Since the August 7 blogpost was written, several facts have changed, making the picture even more grim.

Medica, the only remaining insurer in the Iowa ACA-compliant individual healthcare market, has now requested a 56.7% increase in individual insurance premiums. To continue reading, click here.


"Marshaling" Could Not Rescue Junior Lienholder in Farm Bankruptcy

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 debtors in this Chapter 7 bankruptcy case were a husband and wife engaged in a farming operation. They owned farm machinery and equipment, which netted $55,613 in sales proceeds, and a homestead valued at $292,000. Farm Credit had a primary security interest in the debtors’ machinery, equipment, and proceeds, as well as a mortgage on their homestead. Growmark held a second priority security interest in the debtors’ farm equipment, machinery, and proceeds. The debtors owed Farm Credit approximately $210,163.25 and Growmark approximately $37,762.22. In other words, the value of the secured assets (including the value of the homestead) exceeded secured liabilities.

Continue reading here.

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CALT 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. CALT'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.

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