November 2018
Prenuptial Agreement Unenforceable, Farmland Divided
On November 7, 2018, the Iowa Court of Appeals issued an opinion regarding the proper division of farmland for a divorcing couple. The court found the prenuptial agreement signed by the couple unenforceable and the farming assets to be divisible, despite the fact that they were gifted to or inherited by the husband.
Gifted Property Divided in Farm Divorce
On November 7, 2018, the Iowa Court of Appeals issued an opinion regarding division of monetary gifts and assets during a divorce proceeding. The Court found that certain gifted assets could be divided despite being separate property.
Dicamba Registration Update
The Environmental Protection Agency (EPA) released a notice on October 31st stating that it would be extending the registration of dicamba for over-the top use for an additional two years.
Court Expands Scope of Beef Checkoff Lawsuit to Include 13 Additional States
In 2016, the Ranchers Cattlemen Legal Defense Fund (R-CALF) filed a complaint claiming the United States Department of Agriculture (USDA) was violating the First Amendment through advertising done by the Beef Promotion and Research Act (the federal Beef Checkoff). The action was recently revived and expanded.
IRS Issues Guidance for Several Tax Cuts & Jobs Act Provisions
Proposed IRS Rule Would Prevent Gift & Estate Tax "Clawback"
On November 20, 2018, IRS issued a proposed rule providing that individuals who make gifts while the basic exclusion amount (BEA) is temporarily doubled will get to take full advantage of that increased BEA for those gifts, even if the BEA is lower at the time the donor dies. In other words, the proposed regulations would eliminate a so-called “clawback.” The regulations would be effective after publication of a Treasury decision adopting them as final.
Continue reading here.
Final Regulations Issued for Head of Household Due Diligence Requirements
On November 7, 2018, Treasury issued final regulations to implement new due diligence requirements applying to tax return preparers making head of household eligibility determinations for their clients. The final regulations largely track the proposed regulations, which were issued July 18. They do clarify, however, that a preparer cannot rely on pre-existing knowledge acquired outside of a tax preparation engagement to meet the due diligence requirement. The regulations also affirm the importance of contemporaneous documentation.
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IRS Issues Proposed Reliance Regs for New Business Interest Deduction Limitation
On November 26, 2018, IRS released 439 pages of proposed regulations, REG-106089-18, to apply the IRS § 163(j) business interest deduction limitation enacted by the Tax Cuts & Jobs Act. Taxpayers may rely upon the proposed regulations until final regulations issue.
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Details Matter When it Comes to Security Interest Priority
A recent case from the Iowa Court of Appeals assesses the impact of a below-market-value purchase on the priority of related security interests in farm equipment. It’s a timely review during this current farm downturn.
A private lender made loans to a farmer and his business entities for the purpose of financing his farming operation. The parties executed security agreements for the transactions to secure all present and future debts owed to the lender. The lender had a blanket security interest in all farm-related property, perfected by the filing of financing statements with the Iowa Secretary of State’s office.
After the lender’s death, the personal representative of his estate filed a petition for replevin against the farmer, his son, and his farming entity seeking possession of all secured property. The district court issued the writ of replevin for some property, but did not grant the writ with respect to two tractors that the farmer had sold to his son. The district court ruled that the son acquired the tractors free of the lender’s security interest because of an “implied course of dealing” between the farmer and the lender that allowed the farmer to sell collateral in which the lender had a security interest without seeking his permission.
Continue reading here.
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Last Chance to Register for Ames Tax School!
We've had a wonderful time seeing so many of you at our 45th Annual Federal Income Tax Schools. We appreciate you all so much! If you haven't had a chance to join us, there is still time to register for the December 10-11 Ames school. You can attend in person or join us for a live webinar from the convenience of your home or office. For more information or to register, click here. We hope to see you in Ames!
Iowa Requires Electronic Filing of 2018 W-2s or 1099s if Withholding Required
Iowa is imposing new electronic filing requirements for 2018 tax year W-2s and 1099s. Businesses with one or more W-2s containing Iowa tax withholding are required to electronically file W-2 for all employees for tax year 2018. Likewise, businesses with one or more 1099s containing Iowa tax withholding are required to electronically file 1099s for all employees for tax year 2018.
For more information, click here.
IRS Issues 2019 Inflation Adjustments
On November 15, 2018, IRS issued its inflation adjustments for the 2019 tax year. More than 60 tax provisions are impacted by the adjustments listed in Rev. Proc. 2018-57. To access the revenue procedure or for a summary of key changes, click here.
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.