Friday, April 2, 2021

Ag Law and Taxation - 2017 Bibliography

Overview

Today's post is a bibliography of my ag law and tax blog articles of 2017.  This will make it easier to find the articles you are looking for in your research.  In late January I posted the 2020 bibliography of articles.  In late February I posted the bibliography of the 2019 articles.  Last month, I posted the 2018 bibliography of articles.  Today’s posting is the bibliography of my 2017 articles.  Later this month I will post the 2016 bibliography. 

The library of content continues to grow with relevant information for you practice or your farming/ranching business.

The 2017 bibliography of articles – it’s the subject matter of today’s post.

BANKRUPTCY

The Most Important Agricultural Law and Tax Developments of 2016

https://lawprofessors.typepad.com/agriculturallaw/2017/01/the-most-important-agricultural-law-and-tax-developments-of-2016.html  

Top Ten Agricultural Law and Tax Developments of 2016 (Ten Through Six)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-and-tax-developments-of-2016-ten-through-six.html

Top Ten Agricultural Law Developments of 2016 (Five Through One)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-developments-of-2016-five-through-one.html

Farm Financial Stress – Debt Restructuring

https://lawprofessors.typepad.com/agriculturallaw/2017/01/farm-financial-stress-debt-restructuring.html

Qualified Farm Indebtedness – A Special Rule for Income Exclusion of Forgiven Debt

https://lawprofessors.typepad.com/agriculturallaw/2017/03/qualified-farm-indebtedness-a-special-rule-for-income-exclusion-of-forgiven-debt.html

What Are a Farmer’s Rights When a Grain Elevator Fails?

https://lawprofessors.typepad.com/agriculturallaw/2017/07/what-are-a-farmers-rights-when-a-grain-elevator-fails.html

Agricultural Law in a Nutshell

https://lawprofessors.typepad.com/agriculturallaw/2017/07/agricultural-law-in-a-nutshell.html

The Business of Agriculture – Upcoming CLE Symposium

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-business-of-agriculture-upcoming-cle-symposium.html

Tough Financial Times in Agriculture and Lending Clauses – Peril for the Unwary

https://lawprofessors.typepad.com/agriculturallaw/2017/10/tough-financial-times-in-agriculture-and-lending-clauses-peril-for-the-unwary.html

What Interest Rate Applies to a Secured Creditor’s Claim in a Reorganization Bankruptcy?

https://lawprofessors.typepad.com/agriculturallaw/2017/11/what-interest-rate-applies-to-a-secured-creditors-claim-in-a-reorganization-bankruptcy.html

PACA Trust Does Not Prevent Chapter 11 DIP’s Use of Cash Collateral

https://lawprofessors.typepad.com/agriculturallaw/2017/11/paca-trust-does-not-prevent-chapter-11-dips-use-of-cash-collateral.html

Are Taxes Dischargeable in Bankruptcy?

https://lawprofessors.typepad.com/agriculturallaw/2017/12/are-taxes-dischargeable-in-bankruptcy.html

Christmas Shopping Season Curtailed? – Bankruptcy Venue Shopping, That Is!

https://lawprofessors.typepad.com/agriculturallaw/2017/12/christmas-shopping-season-curtailed-bankruptcy-venue-shopping-that-is.html

BUSINESS PLANNING

The Most Important Agricultural Law and Tax Developments of 2016

https://lawprofessors.typepad.com/agriculturallaw/2017/01/the-most-important-agricultural-law-and-tax-developments-of-2016.html

Top Ten Agricultural Law and Tax Developments of 2016 (Ten Through Six)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-and-tax-developments-of-2016-ten-through-six.html

Top Ten Agricultural Law Developments of 2016 (Five Through One)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-developments-of-2016-five-through-one.html

C Corporation Penalty Taxes – Time to Dust-Off and Review?

https://lawprofessors.typepad.com/agriculturallaw/2017/01/c-corporation-penalty-taxes-time-to-dust-off-and-review.html

Divisive Reorganizations of Farming and Ranching Corporations

https://lawprofessors.typepad.com/agriculturallaw/2017/01/divisive-reorganizations-of-farming-and-ranching-corporations.html

The Scope and Effect of the “Small Partnership Exception”

https://lawprofessors.typepad.com/agriculturallaw/2017/02/the-scope-and-effect-of-the-small-partnership-exception.html

Using the Right Kind of an Entity to Reduce Self-Employment Tax

https://lawprofessors.typepad.com/agriculturallaw/2017/04/using-the-right-kind-of-an-entity-to-reduce-self-employment-tax.html

Employer-Provided Meals and Lodging

https://lawprofessors.typepad.com/agriculturallaw/2017/05/employer-provided-meals-and-lodging.html

Self-Employment Tax on Farming Activity of Trusts

https://lawprofessors.typepad.com/agriculturallaw/2017/05/self-employment-tax-on-farming-activity-of-trusts.html

Minority Shareholder Oppression Case Raises Several Tax Questions

https://lawprofessors.typepad.com/agriculturallaw/2017/05/minority-shareholder-oppression-case-raises-several-tax-questions.html

Farm Program Payment Limitations and Entity Planning – Part One

https://lawprofessors.typepad.com/agriculturallaw/2017/06/farm-program-payment-limitations-and-entity-planning-part-one.html

Farm Program Payment Limitations and Entity Planning – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2017/06/farm-program-payment-limitations-and-entity-planning-part-two.html

Summer Ag Tax/Estate and Business Planning Conference

https://lawprofessors.typepad.com/agriculturallaw/2017/06/summer-ag-taxestate-and-business-planning-conference.html

An Installment Sale as Part of an Estate Plan

https://lawprofessors.typepad.com/agriculturallaw/2017/07/an-installment-sale-as-part-of-an-estate-plan.html

The Use of a Buy-Sell Agreement for Transitioning a Business

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-use-of-a-buy-sell-agreement-for-transitioning-a-business.html

The Business of Agriculture – Upcoming CLE Symposium

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-business-of-agriculture-upcoming-cle-symposium.html

Forming a Farming/Ranching Corporation Tax-Free

https://lawprofessors.typepad.com/agriculturallaw/2017/08/forming-a-farmingranching-corporation-tax-free.html

Farmers Renting Equipment – Does it Trigger A Self-Employment Tax Liability?

https://lawprofessors.typepad.com/agriculturallaw/2017/08/farmers-renting-equipment-does-it-trigger-a-self-employment-tax-liability.html

New Partnership Audit Rules

https://lawprofessors.typepad.com/agriculturallaw/2017/09/new-partnership-audit-rules.html

Self-Employment Tax on Farm Rental Income – Is the Mizell Veneer Cracking?

https://lawprofessors.typepad.com/agriculturallaw/2017/09/self-employment-tax-on-farm-rental-income-is-the-mizell-veneer-cracking.html

IRS To Finalize Regulations on Tax Status of LLC and LLP Members?

https://lawprofessors.typepad.com/agriculturallaw/2017/10/irs-to-finalize-regulations-on-tax-status-of-llc-and-llp-members.html

H.R. 1 – Farmers, Self-Employment Tax and Business Arrangement Structures

https://lawprofessors.typepad.com/agriculturallaw/2017/11/hr-1-farmers-self-employment-tax-and-business-arrangement-structures.html

Summer 2018 – Farm Tax and Farm Business Education

https://lawprofessors.typepad.com/agriculturallaw/2017/11/summer-2018-farm-tax-and-farm-business-education.html

Partnerships and Tax Law – Details Matter

https://lawprofessors.typepad.com/agriculturallaw/2017/11/partnership-and-tax-law-details-matter.html   

CIVIL LIABILITIES

The Most Important Agricultural Law and Tax Developments of 2016

https://lawprofessors.typepad.com/agriculturallaw/2017/01/the-most-important-agricultural-law-and-tax-developments-of-2016.html

Top Ten Agricultural Law and Tax Developments of 2016 (Ten Through Six)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-and-tax-developments-of-2016-ten-through-six.html

Top Ten Agricultural Law and Developments of 2016 (Five Through One)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-developments-of-2016-five-through-one.html

Recreational Use Statutes – What is Covered?

https://lawprofessors.typepad.com/agriculturallaw/2017/02/recreational-use-statutes-what-is-covered.html

Is Aesthetic Damage Enough to Make Out a Nuisance Claim?

https://lawprofessors.typepad.com/agriculturallaw/2017/04/is-aesthetic-damage-enough-to-make-out-a-nuisance-claim.html

Liability Associated with a Range of Fires and Controlled Burns

https://lawprofessors.typepad.com/agriculturallaw/2017/04/liability-associated-with-a-range-fires-and-controlled-burns.html

What’s My Liability for Spread of Animal Disease

https://lawprofessors.typepad.com/agriculturallaw/2017/06/whats-my-liability-for-spread-of-animal-disease.html

Dicamba Spray-Drift Issues

https://lawprofessors.typepad.com/agriculturallaw/2017/07/dicamba-spray-drift-issues.html

Agricultural Law in a Nutshell

https://lawprofessors.typepad.com/agriculturallaw/2017/07/agricultural-law-in-a-nutshell.html

The Business of Agriculture – Upcoming CLE Symposium

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-business-of-agriculture-upcoming-cle-symposium.html

Right-to-Farm Laws

            https://lawprofessors.typepad.com/agriculturallaw/2017/09/right-to-farm-laws.html

CONTRACTS

The Most Important Agricultural Law and Tax Developments of 2016

https://lawprofessors.typepad.com/agriculturallaw/2017/01/the-most-important-agricultural-law-and-tax-developments-of-2016.html

Top Ten Agricultural Law and Tax Developments of 2016 (Ten Through Six)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-and-tax-developments-of-2016-ten-through-six.html

Top Ten Agricultural Law Developments of 2016 (Five Through One)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-developments-of-2016-five-through-one.html

Another Issue With Producing Livestock on Contract – Insurance

https://lawprofessors.typepad.com/agriculturallaw/2017/01/another-issue-with-producing-livestock-on-contract-insurance.html

The Ability of Tenants-in-Common To Bind Co-Tenants to a Farm Lease – and Related Issues

https://lawprofessors.typepad.com/agriculturallaw/2017/02/the-ability-of-tenants-in-common-to-bind-co-tenants-to-a-farm-lease-and-related-issues.html

Ag Goods Sold at Auction – When is a Contract Formed?

https://lawprofessors.typepad.com/agriculturallaw/2017/05/ag-goods-sold-at-auction-when-is-a-contract-formed.html

Agricultural Law in a Nutshell

https://lawprofessors.typepad.com/agriculturallaw/2017/07/agricultural-law-in-a-nutshell.html

The Business of Agriculture – Upcoming CLE Symposium

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-business-of-agriculture-upcoming-cle-symposium.html

Ag Contracts and Express Warranties

https://lawprofessors.typepad.com/agriculturallaw/2017/09/ag-contracts-and-express-warranties.html

What Remedies Does a Buyer Have When a Seller of Ag Goods Breaches the Contract?           

https://lawprofessors.typepad.com/agriculturallaw/2017/10/what-remedies-does-a-buyer-have-when-a-seller-of-ag-goods-breaches-the-contract.html  

COOPERATIVES

The Most Important Agricultural Law and Tax Developments of 2016

https://lawprofessors.typepad.com/agriculturallaw/2017/01/the-most-important-agricultural-law-and-tax-developments-of-2016.html

Top Ten Agricultural Law Developments of 2016 (Five Through One)

https://lawprofessors.typepad.com/agriculturallaw/2017/01/top-ten-agricultural-law-and-tax-developments-of-2016-ten-through-six.html

What Is a Cooperative Director’s Liability to Member-Shareholders and Others?

https://lawprofessors.typepad.com/agriculturallaw/2017/07/what-is-a-cooperative-directors-liability-to-member-shareholders-and-others.html

CRIMINAL LIABILITIES

The Necessity Defense to Criminal Liability

https://lawprofessors.typepad.com/agriculturallaw/2017/05/the-necessity-defense-to-criminal-liability.html

The Business of Agriculture – Upcoming CLE Symposium

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-business-of-agriculture-upcoming-cle-symposium.html

What Problems Does The Migratory Bird Treaty Act Pose For Farmers, Ranchers and Rural Landowners?

https://lawprofessors.typepad.com/agriculturallaw/2017/08/what-problems-does-the-migratory-bird-treaty-act-pose-for-farmers-ranchers-and-rural-landowners.html

ENVIRONMENTAL LAW

Drainage Activities on Farmland and the USDA

https://lawprofessors.typepad.com/agriculturallaw/2017/03/drainage-activities-on-farmland-and-the-usda.html

The Application of the Endangered Species Act to Activities on Private Land

https://lawprofessors.typepad.com/agriculturallaw/2017/04/the-application-of-the-endangered-species-act-to-activities-on-private-land.html

Eminent Domain – The Government’s Power to “Take” Private Property

https://lawprofessors.typepad.com/agriculturallaw/2017/06/eminent-domain-the-governments-power-to-take-private-property.html

Spray Drift As Hazardous Waste?

https://lawprofessors.typepad.com/agriculturallaw/2017/07/spray-drift-as-hazardous-waste.html

What Problems Does The Migratory Bird Treaty Act Pose For Farmers, Ranchers and Rural Landowners?

https://lawprofessors.typepad.com/agriculturallaw/2017/08/what-problems-does-the-migratory-bird-treaty-act-pose-for-farmers-ranchers-and-rural-landowners.html

The Prior Converted Cropland Exception From Clean Water Act Jurisdiction

https://lawprofessors.typepad.com/agriculturallaw/2017/09/the-prior-converted-cropland-exception-from-clean-water-act-jurisdiction.html

Air Emission Reporting Requirement For Livestock Operations

https://lawprofessors.typepad.com/agriculturallaw/2017/11/air-emission-reporting-requirement-for-livestock-operations.html

ESTATE PLANNING

Rights of Refusal and the Rule Against Perpetuities

https://lawprofessors.typepad.com/agriculturallaw/2017/01/rights-of-refusal-and-the-rule-against-perpetuities.html

Some Thoughts On Long-Term Care Insurance

https://lawprofessors.typepad.com/agriculturallaw/2017/02/some-thoughts-on-long-term-care-insurance.html

Overview of Gifting Rules and Strategies                                                                 

https://lawprofessors.typepad.com/agriculturallaw/2017/04/overview-of-gifting-rules-and-strategies.html

Disinheriting a Spouse – Can It Be Done?

https://lawprofessors.typepad.com/agriculturallaw/2017/04/disinheriting-a-spouse-can-it-be-done.html

Specific Property Devised in Will (or Trust) That Doesn’t Exist At Death – What Happens?

https://lawprofessors.typepad.com/agriculturallaw/2017/05/specific-property-devised-in-will-that-doesnt-exist-at-death-what-happens.html

Discounting IRAs for Income Tax Liability?

https://lawprofessors.typepad.com/agriculturallaw/2017/05/discounting-iras-for-income-tax-liability.html

Special Use Valuation and Cash Leasing

https://lawprofessors.typepad.com/agriculturallaw/2017/05/special-use-valuation-and-cash-leasing.html

Self-Employment Tax On Farming Activity Of Trusts

https://lawprofessors.typepad.com/agriculturallaw/2017/05/self-employment-tax-on-farming-activity-of-trusts.html

Would an Interest Charge Domestic International Sales Corporation Benefit a Farming Business?

https://lawprofessors.typepad.com/agriculturallaw/2017/07/would-an-interest-charge-domestic-international-sales-corporation-benefit-a-farming-business.html

An Installment Sale as Part of An Estate Plan

https://lawprofessors.typepad.com/agriculturallaw/2017/07/an-installment-sale-as-part-of-an-estate-plan.html

Using An IDGT For Wealth Transfer and Business Succession

https://lawprofessors.typepad.com/agriculturallaw/2017/07/using-an-idgt-for-wealth-transfer-and-business-succession.html

Federal Tax Claims in Decedent’s Estates – What’s the Liability and Priority?

https://lawprofessors.typepad.com/agriculturallaw/2017/08/federal-tax-claims-in-decedents-estates-whats-the-liability-and-priority.html

Estate Tax Portability – The Authority of the IRS To Audit

https://lawprofessors.typepad.com/agriculturallaw/2017/10/estate-tax-portability-the-authority-of-the-irs-to-audit.html

Digital Assets and Estate Planning       

https://lawprofessors.typepad.com/agriculturallaw/2017/10/digital-assets-and-estate-planning.html

INCOME TAX

The Burden of Proof in Tax Cases – What are the Rules?

https://lawprofessors.typepad.com/agriculturallaw/2017/02/the-burden-of-proof-in-tax-cases-what-are-the-rules.html

The Home Office Deduction

https://lawprofessors.typepad.com/agriculturallaw/2017/02/the-home-office-deduction.html

IRS To Continue Attacking Cash Method For Farmers Via the “Farming Syndicate Rule”

https://lawprofessors.typepad.com/agriculturallaw/2017/02/irs-to-continue-attacking-cash-method-for-farmers-via-the-farming-syndicate-rule.html

Using Schedule J As A Planning Tool For Clients With Farm Income

https://lawprofessors.typepad.com/agriculturallaw/2017/03/using-schedule-j-as-a-planning-tool-for-clients-with-farm-income.html

Deductibility of Soil and Water Conservation Expenses

https://lawprofessors.typepad.com/agriculturallaw/2017/03/deductibility-of-soil-and-water-conservation-expenses.html

Should Purchased Livestock Be Depreciated or Inventoried?

https://lawprofessors.typepad.com/agriculturallaw/2017/03/should-purchased-livestock-be-depreciated-or-inventoried.html

The Changing Structure of Agricultural Production and…the IRS

https://lawprofessors.typepad.com/agriculturallaw/2017/03/the-changing-structure-of-agricultural-production-andthe-irs.html

Farm-Related Casualty Losses and Involuntary Conversions – Helpful Tax Rules in Times of Distress

https://lawprofessors.typepad.com/agriculturallaw/2017/03/farm-related-casualty-losses-and-involuntary-conversions-helpful-tax-rules-in-times-of-distress.html

Charitable Contributions Via Trust

https://lawprofessors.typepad.com/agriculturallaw/2017/03/charitable-contributions-via-trust.html

Ag Tax Policy The Focus in D.C.

https://lawprofessors.typepad.com/agriculturallaw/2017/04/ag-tax-policy-the-focus-in-dc-.html

For Depreciation Purposes, What Does Placed in Service Mean?

https://lawprofessors.typepad.com/agriculturallaw/2017/04/for-depreciation-purposes-what-does-placed-in-service-mean.html

Tax Treatment of Commodity Futures and Options

https://lawprofessors.typepad.com/agriculturallaw/2017/04/tax-treatment-of-commodity-futures-and-options.html

Discounting IRAs for Income Tax Liability?

https://lawprofessors.typepad.com/agriculturallaw/2017/05/discounting-iras-for-income-tax-liability.html

Like-Kind Exchanges, Reverse Exchanges, and the Safe Harbor

https://lawprofessors.typepad.com/agriculturallaw/2017/05/like-kind-exchanges-reverse-exchanges-and-the-safe-harbor.html

Insights Into Handling IRS Disputes

https://lawprofessors.typepad.com/agriculturallaw/2017/05/insights-into-handling-irs-disputes.html

Employer-Provided Meals and Lodging

https://lawprofessors.typepad.com/agriculturallaw/2017/05/employer-provided-meals-and-lodging.html

Self-Employment Tax On Farming Activity Of Trusts

https://lawprofessors.typepad.com/agriculturallaw/2017/05/self-employment-tax-on-farming-activity-of-trusts.html

Minority Shareholder Oppression Case Raises Several Tax Questions

https://lawprofessors.typepad.com/agriculturallaw/2017/05/minority-shareholder-oppression-case-raises-several-tax-questions.html

Input Costs – When Can a Deduction Be Claimed?

https://lawprofessors.typepad.com/agriculturallaw/2017/06/input-costs-when-can-a-deduction-be-claimed.html

Like-Kind Exchange Issues

https://lawprofessors.typepad.com/agriculturallaw/2017/06/like-kind-exchange-issues.html

Tax Issues With Bad Debt Deductions

https://lawprofessors.typepad.com/agriculturallaw/2017/06/tax-issues-with-bad-debt-deductions.html

Like-Kind Exchanges – The Related Party Rule and a Planning Opportunity

https://lawprofessors.typepad.com/agriculturallaw/2017/06/like-kind-exchanges-the-related-party-rule-and-a-planning-opportunity.html

Tax Treatment of Cooperative Value-Added Payments

https://lawprofessors.typepad.com/agriculturallaw/2017/06/tax-treatment-of-cooperative-value-added-payments.html

Would an Interest Charge Domestic International Sales Corporation Benefit a Farming Business?

https://lawprofessors.typepad.com/agriculturallaw/2017/07/would-an-interest-charge-domestic-international-sales-corporation-benefit-a-farming-business.html

Timber Tax Issues – Part One

https://lawprofessors.typepad.com/agriculturallaw/2017/07/timber-tax-issues-part-one.html

Timber Tax Issues – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2017/07/timber-tax-issues-part-two.html

An Installment Sale as Part of An Estate Plan

https://lawprofessors.typepad.com/agriculturallaw/2017/07/an-installment-sale-as-part-of-an-estate-plan.html

Using An IDGT For Wealth Transfer and Business Succession

https://lawprofessors.typepad.com/agriculturallaw/2017/07/using-an-idgt-for-wealth-transfer-and-business-succession.html

Prospects for Tax Legislation

https://lawprofessors.typepad.com/agriculturallaw/2017/08/prospects-for-tax-legislation.html

Deferred Payment Contracts

https://lawprofessors.typepad.com/agriculturallaw/2017/08/deferred-payment-contracts.html

When Is A Farmer Not A “Qualified Farmer” For Conservation Easement Donation Purposes?

https://lawprofessors.typepad.com/agriculturallaw/2017/08/when-is-a-farmer-not-a-qualified-farmer-for-conservation-easement-donation-purposes.html

Substantiating Charitable Contributions

https://lawprofessors.typepad.com/agriculturallaw/2017/08/substantiating-charitable-contributions.html

Forming a Farming/Ranching Corporation Tax-Free

https://lawprofessors.typepad.com/agriculturallaw/2017/08/forming-a-farmingranching-corporation-tax-free.html

Farmers Renting Equipment – Does It Trigger A Self-Employment Tax Liability?

https://lawprofessors.typepad.com/agriculturallaw/2017/08/farmers-renting-equipment-does-it-trigger-a-self-employment-tax-liability.html

Commodity Credit Corporation Loans and Elections

https://lawprofessors.typepad.com/agriculturallaw/2017/09/commodity-credit-corporation-loans-and-elections.html

New Partnership Audit Rules

https://lawprofessors.typepad.com/agriculturallaw/2017/09/new-partnership-audit-rules.html

Alternatives to Like-Kind Exchanges of Farmland

https://lawprofessors.typepad.com/agriculturallaw/2017/09/alternatives-to-like-kind-exchanges-of-farmland.html

South Dakota Attempts To Change Internet Sales Taxation – What Might Be The Impact On Small Businesses?

https://lawprofessors.typepad.com/agriculturallaw/2017/09/south-dakota-attempts-to-change-internet-sales-taxation-what-might-be-the-impact-on-small-businesses.html

Fall Tax Schools

https://lawprofessors.typepad.com/agriculturallaw/2017/09/fall-tax-schools.html

Self-Employment Tax on Farm Rental Income – Is the Mizell Veneer Cracking?

https://lawprofessors.typepad.com/agriculturallaw/2017/09/self-employment-tax-on-farm-rental-income-is-the-mizell-veneer-cracking.html

Tax Treatment of Settlements and Court Judgments

https://lawprofessors.typepad.com/agriculturallaw/2017/10/tax-treatment-of-settlements-and-court-judgments.html

The “Perpetuity” Requirement For Donated Easements

https://lawprofessors.typepad.com/agriculturallaw/2017/10/the-perpetuity-requirement-for-donated-easements.html

The Tax Rules Involving Prepaid Farm Expenses

https://lawprofessors.typepad.com/agriculturallaw/2017/10/the-tax-rules-involving-prepaid-farm-expenses.html

It’s Just About Tax School Time

https://lawprofessors.typepad.com/agriculturallaw/2017/10/its-just-about-tax-school-time.html

IRS To Finalize Regulations On Tax Status of LLC and LLP Members?

https://lawprofessors.typepad.com/agriculturallaw/2017/10/irs-to-finalize-regulations-on-tax-status-of-llc-and-llp-members.html

The Deductibility (Or Non-Deductibility) of Interest

https://lawprofessors.typepad.com/agriculturallaw/2017/10/the-deductibility-or-non-deductibility-of-interest.html

H.R. 1 - Farmers, Self-Employment Tax and Business Arrangement Structures

https://lawprofessors.typepad.com/agriculturallaw/2017/11/hr-1-farmers-self-employment-tax-and-business-arrangement-structures.html

The Broad Reach of the Wash-Sale Rule

https://lawprofessors.typepad.com/agriculturallaw/2017/11/the-broad-reach-of-the-wash-sale-rule.html

Comparison of the House and Senate Tax Bills – Implications for Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2017/11/comparison-of-the-house-and-senate-tax-bills-implications-for-agriculture.html

Partnerships and Tax Law – Details Matter

https://lawprofessors.typepad.com/agriculturallaw/2017/11/partnership-and-tax-law-details-matter.html

Senate Clears Tax Bill - On To Conference

https://lawprofessors.typepad.com/agriculturallaw/2017/12/senate-clears-tax-bill-on-to-conference-committee.html

Are Taxes Dischargeable in Bankruptcy?

https://lawprofessors.typepad.com/agriculturallaw/2017/12/are-taxes-dischargeable-in-bankruptcy.html

Bitcoin Fever and the Tax Man

https://lawprofessors.typepad.com/agriculturallaw/2017/12/bitcoin-fever-and-the-tax-man.html

House and Senate to Vote on Conference Tax Bill This Week

https://lawprofessors.typepad.com/agriculturallaw/2017/12/house-and-senate-to-vote-on-conference-tax-bill-this-week.html

Another Tax Bill Introduced, Year-End Planning, and Jan. 10 Seminar/Webinar

https://lawprofessors.typepad.com/agriculturallaw/2017/12/another-tax-bill-introduced-year-end-planning-and-jan-10-seminarwebinar.html

PUBLICATIONS

Agricultural Law in a Nutshell

https://lawprofessors.typepad.com/agriculturallaw/2017/07/agricultural-law-in-a-nutshell.html

REAL PROPERTY

Another Issue When the Definition of “Agriculture” Matters – Property Tax

https://lawprofessors.typepad.com/agriculturallaw/2017/01/another-issue-when-the-definition-of-agriculture-matters-property-tax.html

The Ability of Tenants-in-Common To Bind Co-Tenants to a Farm Lease – and Related Issues

https://lawprofessors.typepad.com/agriculturallaw/2017/02/the-ability-of-tenants-in-common-to-bind-co-tenants-to-a-farm-lease-and-related-issues.html

Like-Kind Exchanges, Reverse Exchanges, and the Safe Harbor

https://lawprofessors.typepad.com/agriculturallaw/2017/05/like-kind-exchanges-reverse-exchanges-and-the-safe-harbor.html

Like-Kind Exchange Issues

https://lawprofessors.typepad.com/agriculturallaw/2017/06/like-kind-exchange-issues.html

Easements on Agricultural Land – Classification and Legal Issues

https://lawprofessors.typepad.com/agriculturallaw/2017/08/easements-on-agricultural-land-classification-and-legal-issues.html

Should I Enter Into An Oil and Gas Lease?

https://lawprofessors.typepad.com/agriculturallaw/2017/12/should-i-enter-into-an-oil-and-gas-lease.html

REGULATORY LAW

Checkoffs, The Courts and Free Speech

https://lawprofessors.typepad.com/agriculturallaw/2017/01/checkoffs-the-courts-and-free-speech.html

Joint Employment Situations In Agriculture – What’s the FLSA Test?

https://lawprofessors.typepad.com/agriculturallaw/2017/02/joint-employment-situations-in-agriculture-whats-the-flsa-test.html

Farmers, Ranchers and Government Administrative Agencies

https://lawprofessors.typepad.com/agriculturallaw/2017/03/farmers-ranchers-and-government-administrative-agencies.html

IRS To Target “Hobby” Farmers

https://lawprofessors.typepad.com/agriculturallaw/2017/03/irs-to-target-hobby-farmers.html

Drainage Activities on Farmland and the USDA

https://lawprofessors.typepad.com/agriculturallaw/2017/03/drainage-activities-on-farmland-and-the-usda.html

What is a “Separate Person” For Payment Limitation Purposes?

https://lawprofessors.typepad.com/agriculturallaw/2017/03/what-is-a-separate-person-for-payment-limitation-purposes.html

Livestock Indemnity Payments – What They Are and Tax Reporting Options

https://lawprofessors.typepad.com/agriculturallaw/2017/03/livestock-indemnity-payments-what-they-are-and-tax-reporting-options.html

Can One State Regulate Agricultural Production Activities in Other States?

https://lawprofessors.typepad.com/agriculturallaw/2017/06/can-one-state-regulate-agricultural-production-activities-in-other-states.html

Farm Program Payment Limitations and Entity Planning – Part One

https://lawprofessors.typepad.com/agriculturallaw/2017/06/farm-program-payment-limitations-and-entity-planning-part-one.html

Farm Program Payment Limitations and Entity Planning – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2017/06/farm-program-payment-limitations-and-entity-planning-part-two.html

Eminent Domain – The Government’s Power to “Take” Private Property

https://lawprofessors.typepad.com/agriculturallaw/2017/06/eminent-domain-the-governments-power-to-take-private-property.html

Department of Labor Overtime Rules Struck Down – What’s the Impact on Ag?

https://lawprofessors.typepad.com/agriculturallaw/2017/09/department-of-labor-overtime-rules-struck-down-whats-the-impact-on-ag.html

The Prior Converted Cropland Exception From Clean Water Act Jurisdiction

https://lawprofessors.typepad.com/agriculturallaw/2017/09/the-prior-converted-cropland-exception-from-clean-water-act-jurisdiction.html

Air Emission Reporting Requirement For Livestock Operations

https://lawprofessors.typepad.com/agriculturallaw/2017/11/air-emission-reporting-requirement-for-livestock-operations.html

Federal Labor Law and Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2017/11/federal-labor-law-and-agriculture.html

 Electronic Logs For Truckers and Implications for Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2017/12/electronic-logs-for-truckers-and-implications-for-agriculture.html

SECURED TRANSACTIONS

Ag Supply Dealer Liens – Important Tool in Tough Financial Times

https://lawprofessors.typepad.com/agriculturallaw/2017/01/ag-supply-dealer-liens-important-tool-in-tough-financial-times.html

“Commercial Reasonableness” of Collateral Sales

https://lawprofessors.typepad.com/agriculturallaw/2017/07/commercial-reasonableness-of-collateral-sales.html

What Are A Farmer’s Rights When a Grain Elevator Fails?

https://lawprofessors.typepad.com/agriculturallaw/2017/07/what-are-a-farmers-rights-when-a-grain-elevator-fails.html

Selling Collateralized Ag Products – The “Farm Products” Rule

https://lawprofessors.typepad.com/agriculturallaw/2017/09/selling-collateralized-ag-products-the-farm-products-rule.html

SEMINARS AND CONFERENCES

Fall Tax Schools

https://lawprofessors.typepad.com/agriculturallaw/2017/09/fall-tax-schools.html

Another Tax Bill Introduced, Year-End Planning, and Jan. 10 Seminar/Webinar

https://lawprofessors.typepad.com/agriculturallaw/2017/12/another-tax-bill-introduced-year-end-planning-and-jan-10-seminarwebinar.html

Summer 2018 - Farm Tax and Farm Business Education

https://lawprofessors.typepad.com/agriculturallaw/2017/11/summer-2018-farm-tax-and-farm-business-education.html

The Business of Agriculture – Upcoming CLE Symposium

https://lawprofessors.typepad.com/agriculturallaw/2017/08/the-business-of-agriculture-upcoming-cle-symposium.html

Summer Ag Tax/Estate and Business Planning Conference

https://lawprofessors.typepad.com/agriculturallaw/2017/06/summer-ag-taxestate-and-business-planning-conference.html

WATER LAW

Prior Appropriation – First in Time, First in Right

https://lawprofessors.typepad.com/agriculturallaw/2017/02/prior-appropriation-first-in-time-first-in-right.html

Kansas Water Law - Reactions to and Potential Consequences of the Garetson decision

https://lawprofessors.typepad.com/agriculturallaw/2017/02/kansas-water-law-reactions-to-and-potential-consequences-of-the-garetson-decision.html

Public Access To Private Land Via Water

https://lawprofessors.typepad.com/agriculturallaw/2017/04/public-access-to-private-land-via-water.html

Big Development for Water in the West - Federal Implied Reserved Water Rights Doctrine Applies to Groundwater

https://lawprofessors.typepad.com/agriculturallaw/2017/12/big-development-for-water-in-the-west-federal-implied-reserved-water-rights-doctrine-applies-to-grou.html

April 2, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Friday, March 26, 2021

C Corporation Compensation Issues

Overview

A “hot-button” audit issue for S corporations involves the issue of “reasonable compensation” for shareholders.  Compensation is also an important issue in the C corporate context.  While in the S corporate context the temptation is to set compensation too low, the concern is just the opposite when a C corporation is involved. 

But, what is “reasonable compensation”?  Why does it matter?

Compensation issues in the C corporation context – it’s the topic of today’s post.

The Basic Problem

A corporate-level deduction is allowed for “reasonable” salaries and compensation paid to employees for their personal services.  Because of the dual-level taxation associated with C corporations (on corporate income when earned and again when paid as dividends) C corporations have an incentive to pay larger than normal salaries so as to reduce their taxable income and get corporate earnings to owners with only one level of tax.  But, the IRS can challenge what it deems to be “excessive” salaries as disguised dividends resulting in a loss of a corporate deduction from taxable income and the addition of the “excessive” amount to the corporation’s net taxable income.  Conversely, in certain situations, corporate employees may receive only a nominal salary in an attempt to minimize FICA and Medicare taxes.  Upon audit, IRS may increase the salary with the result that FICA and Medicare tax will be due, plus interest and penalties.  Another problem associated with setting salaries too low is that the corporation could be assessed for payroll taxes on the unreported compensation.  The penalties and interest associated with unreported compensation are often greater than an income tax deficiency assessment.  The quarterly payroll deposit rules will typically have been violated, resulting in cascading penalties that include the failure to timely deposit and failure to properly report.

What is a “Reasonable” Salary?

Corporate salaries must be “reasonable” in light of the personal services that are actually rendered.  I.R.C. §162(a)(1).  However, “reasonable” is not defined in the Code, and the Regulations provide only that “reasonable compensation is an amount paid for like service by like enterprises under like circumstances.” Treas. Regs. §§1.162-7(b)(3) and 1.1366-3(a). Thus, the facts and circumstances of each particular situation are determinative of the outcome.  The courts, in numerous cases involving the issue, have set forth several factors to be used in determining the reasonableness of salaries, including.  Likewise the IRS Audit Manual utilizes the same factors. 

The factors are as follows: 

  • The level of the salary in light of the employee’s qualifications
  • The compensation paid in light of the nature and extent of the employee’s work, with consideration paid to the role that the shareholder plays in the corporation (e.g., the employee’s position, number of hours worked and duties performed)
  • How the compensation compares to compensation paid for similar services by similar entities
  • Whether the compensation is reasonable in relation to the salary history of the corporation
  • Whether the compensation is reasonable in light of the character and financial condition of the corporation
  • Whether a hypothetical, independent investor would conclude that there is an adequate return on investment after considering the shareholder’s compensation
  • The size and complexity of the business
  • How the amount of salaries paid compares to corporate sales and net income
  • General economic conditions
  • How the amount of salaries compare to shareholder distributions and retained earnings
  • The corporation’s dividend history
  • Whether the employee and employer dealt at arm’s length
  • Whether the employee guaranteed the employer’s debt
  • Whether there has been a “catch-up” element involved where the corporation is making up for years when the employee was under paid
  • Whether the corporation has developed compensation policy for employees allowing them to participate in the company’s success

The cases confirm that no single factor controls.  Instead, a combination of the factors must be considered.  In addition, the factors are not all inclusive and may not be given equal weight.  Fewer or additional factors may be appropriate, depending on the surrounding facts and circumstances.

What’s “reasonable compensation” for an owner of a closely-held farming or ranching operation?  The answer to that question depends on how the factors listed above apply to the facts and circumstances of the particular situation. 

Tax Planning Strategy

As a tax planning strategy, before year-end, each shareholder/employee’s compensation should be reviewed for reasonableness and increased by payment of a year-end bonus if needed.  While reasonableness is based on the facts and circumstances, compensation can often be set at the low end of a wide salary range that is both reasonable and supportable.  The better the documentation explaining why wages and bonuses are appropriate, the more likely that the payments can withstand IRS attack.

Consider the following example:

Joe starts up an accounting practice, and employs Blake and Terry.  Joe operates as a personal service corporation.  The firm has a successful first year, generating an extra $300,000 in corporate net income.  Joe declares a bonus for himself in the amount of $300,000, which eliminates the corporation’s taxable income.  However, $200,000 of the $300,000 in additional income was generated by the efforts of Blake and Terry. Joe actually spent a couple of months of the year taking a sabbatical in the north woods of Minnesota playing his ukulele for the animals that would listen and giving a break to Blake and Terry from his dry humor. Joe claimed he continued to “manage’ the practice from his remote location.

The IRS would likely take the position that the extra time and effort expended by Joe in managing the accounting practice is, at best, a nominal factor to be taken into account when a large portion of the income is based on the services rendered by other employees.  So, IRS would likely conclude that $200,000 of net income paid to Joe is actually a non-deductible dividend to Joe.  The resulting additional corporate income is taxed at the 21 percent rate applicable to personal service corporations.  The result would be an added tax liability of $42,000. 

Joe could elect to have the company taxed as an S corporation.  Joe would then refrain from declaring and paying the $300,000 bonus to himself, instead picking it up as an S corporation distribution which is taxed to the shareholders on a pro rata basis.  But, if Joe does this, IRS could examine the $300,000 paid as an S corporation distribution to determine whether it actually should be treated as compensation to Joe.  If all or a portion of the $300,000 is deemed to be compensation, Social Security and Medicare tax will be assessed on the amount deemed to be compensation.  Also, with an S election, if Joe were to set his compensation at the amount of the maximum for qualified retirement plan funding, with the balance of corporate net income structured as an S corporation distribution, that would avoid Medicare tax on the amount of the S corporation distribution.  IRS, however, would likely examine that scenario to determine whether the compensation amount is too low.

Prominent Case

There have been numerous prominent cases on the issue of reasonable compensation.  A particularly high-profile one involved the founder and CEO of Menards, a chain of “home improvement” stores located in the Midwest.

In Menard, Inc. v. Commissioner, 560 F.3d 620 (7th Cir. 2009), the IRS challenged the $20 million salary of a corporate CEO (who was also a shareholder/employee that worked full time and owned all of the voting stock and 56 percent of the non-voting stock) as unreasonable. The compensation plan for the CEO included a base salary, a profit-sharing plan and a bonus plan that had been in place since 1973.  Over $17 million of the total amount was paid in accordance with a bonus plan that had been in place since 1973.   The bonus was tied to 5 percent of the corporation’s net income before taxes.  The Tax Court disallowed all but $7 million of the salary (after comparisons to CEO salaries of competing businesses – Home Depot and Lowe’s) determining it to be a disguised dividend.  On further review, the appellate court reversed.  The appellate court determined that, the under the CEO’s management, corporate revenues grew from $788 million in 1991 to $3.4 billion in 1998 (the year at issue) and the corporation’s taxable income grew from $59 million to $315 million during the same timeframe.  The corporation’s rate of return on shareholder’s equity in 1998 was higher than that of either company the Tax Court used for comparison purposes.  The appellate court noted that the CEO handled a large part of the duties which were normally delegated in other companies to subordinates.  In addition, the fact that there was no independent Board of Directors for the corporation required the CEO to accept greater responsibility and duties that normally don’t apply to comparable CEOs.  Thus, to the appellate court, the 5 percent of net corporate income did not look at all like a dividend and the appellate court held that the Tax Court committed clear error in holding that the salary was excessive.  That was particularly the case, the court noted because the compensation that the Tax Court determined to be a disguised dividend was paid before a determination of the corporation’s net income for the year, and was paid on an annual basis.  That meant that it was not a set dollar amount that constituted a dividend.   

The appellate court was also highly skeptical of the Tax Court’s remark that the owner of a business has no need for incentive compensation because ownership is incentive enough. The appellate court reasoned that owners should not be treated differently from other managers and also stated that the Tax Court had established itself as the “super-personnel department for closely-held corporations.” 

Recent Case

In Aspro, Inc. v. Comr., T.C. Memo. 2021-8, the petitioner was a C corporation in the asphalt paving business incorporated under Iowa law with its principal place of business in Iowa.  The petitioner had three shareholders and did not declare or distribute any dividends to them during the tax years in issue (2012-2014) or in any prior year.  This was despite the petitioner having significant profits before setting management fees.  Thus, the shareholders didn’t receive any return on their equity investment.  The petitioner did not enter into any written management or consulting services agreements with any of its shareholders. Also, there was no management fee rate or billing structure negotiated or agreed to between the shareholders and petitioner at the beginning of any of the years in issue.  In addition, none of the shareholders invoiced or billed the petitioner for any services provided indirectly via other legal entities that the shareholders controlled. Instead, the petitioner’s board of directors would approve the management fees to be paid to the shareholders at a board meeting later in the tax year, when the board had a better idea how the company was going to perform and how much earnings the company should retain.  But, the board minutes did not reflect how the determinations were made.  The petitioner’s board did not attempt to value or quantify any of the services performed on its behalf and simply approved a lump-sum management fee for each shareholder for each year. The amounts were not determined after considering the services performed and their values. There was no correlation between management fees paid and services rendered. In total, the shareholders received management fees exceeding $1 million every year for the years in issue. The management fees were simply paid after-the-fact in an attempt to zero-out the petitioner’s taxable income.

The IRS completely denied the petitioner’s claimed deductions for management fees and amounts the petitioner claimed for the domestic production activities deduction for the years in issue.  The Tax Court upheld the IRS position denying the deduction.  The Tax Court determined that the petitioner failed to prove that the management fees were neither ordinary and necessary business expenses or reasonable in accordance with Treas. Reg. §1.162-7.  Based on the facts and circumstances, the Tax Court concluded that the absence of the dividend payments where the petitioner had available profits created an inference that at least some of the compensation represented a distribution with respect to corporate stock.  While the management fees loosely corresponded to each shareholder’s percentage interest, the Tax Court inferred that the shareholders were receiving disguised distributions based on each shareholder’s equity interest. 

As for the services rendered to the petitioner via the shareholders’ controlled entities, the Tax Court noted that if the services were to be compensated, the petitioner should have invoiced directly for the services.  The services, as a result, did not provide even indirect support for the management fees the petitioner paid to its shareholders.  The Tax Court also noted that the management fees were not set in advance for services to be provided and there was no management agreement that supported any objective pricing that the parties bargained for.  The shareholders also could not explain how the management fees were determined, and the corporate president (and one of petitioner’s board members) displayed a misunderstanding of the nature of deductible management fees and stock distributions.  The Tax Court also noted that the effect of the deduction for management fees was to create little taxable income to the petitioner, indicating that the fees were disguised distributions.  The Tax Court further determined that the petitioner’s president rendered no services to the petitioner other than being the president and, as such was already overcompensated by his base salary and annual bonus totaling approximately $500,000 annually.  Thus, the additional management fee was completely unreasonable as to him.  

Conclusion

Paying “reasonable compensation” in the context of closely-held corporations is critical. 

March 26, 2021 in Business Planning, Income Tax | Permalink | Comments (0)

Sunday, March 21, 2021

Ag Law and Taxation - 2018 Bibliography

Overview

Today's post is a bibliography of my ag law and tax blog articles of 2018.  Many of you have requested that I provide something like this to make it easier to find the articles, and last month I posted the bibliography of the 2020 and 2019 articles.  Soon I will post the bibliography of the 2017 articles and then 2016.  After those are posted.  I will post one long bibliography containing all of the articles up to that point in time.  Then, to close out 2021, I will post the articles of 2021. 

The library of content is piling up.

Cataloging the 2018 ag law and tax blog articles - it's the topic of today's post.

BANKRUPTCY

Top Ten Agricultural Law and Tax Developments of 2017 (Ten through Six)

https://lawprofessors.typepad.com/agriculturallaw/2018/01/top-ten-agricultural-law-and-tax-developments-of-2017-ten-through-six.html

Chapter 12 Bankruptcy – Feasibility of the Reorganization Plan

https://lawprofessors.typepad.com/agriculturallaw/2018/03/chapter-12-bankruptcy-feasibility-of-the-reorganization-plan.html

Farm Bankruptcy and the Preferential Payment Rule

https://lawprofessors.typepad.com/agriculturallaw/2018/05/farm-bankruptcy-and-the-preferential-payment-rule.html

Can a Bankrupt Farm Debtor Make Plan Payments Directly to Creditors?

https://lawprofessors.typepad.com/agriculturallaw/2018/08/can-a-bankrupt-farm-debtor-make-plan-payments-directly-to-creditors.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Chapter 12 Bankruptcy and the Tools-of-the-Trade Exemption

https://lawprofessors.typepad.com/agriculturallaw/2018/11/chapter-12-bankruptcy-and-the-tools-of-the-trade-exemption.html

Developments in Ag Law and Tax

https://lawprofessors.typepad.com/agriculturallaw/2018/11/developments-in-ag-law-and-tax.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

BUSINESS PLANNING

The “Almost Top Ten” Agricultural Law and Tax Developments of 2017

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-almost-top-ten-agricultural-law-and-tax-developments-of-2017.html

The Spousal Qualified Joint Venture

https://lawprofessors.typepad.com/agriculturallaw/2018/02/the-spousal-qualified-joint-venture.html

The Spousal Qualified Joint Venture – Implications for Self-Employment Tax and Federal Farm Program Payment Limitations

https://lawprofessors.typepad.com/agriculturallaw/2018/02/the-spousal-qualified-joint-venture-implications-for-self-employment-tax-and-federal-farm-program-payment-limitations.html

Form a C Corporation – The New Vogue in Business Structure?

https://lawprofessors.typepad.com/agriculturallaw/2018/02/form-a-c-corporation-the-new-vogue-in-business-structure.html

Tax Issues When Forming a C Corporation

https://lawprofessors.typepad.com/agriculturallaw/2018/02/tax-issues-when-forming-a-c-corporation.html

End of Tax Preparation Season Means Tax Seminar Season is About to Begin

https://lawprofessors.typepad.com/agriculturallaw/2018/04/end-of-tax-preparation-season-means-tax-seminar-season-is-about-to-begin.html

Converting a C Corporation to an S Corporation – The Problem of Passive Income

https://lawprofessors.typepad.com/agriculturallaw/2018/05/converting-a-c-corporation-to-an-s-corporation-the-problem-of-passive-income.html

Valuation Discounting

              https://lawprofessors.typepad.com/agriculturallaw/2018/05/valuation-discounting.html

Valuation Discounting – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2018/05/valuation-discounting-part-two.html

The Impact of the TCJA on Estates and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2018/05/the-impact-of-the-tcja-on-estates-and-trusts.html

Buy-Sell Agreements for Family Businesses

https://lawprofessors.typepad.com/agriculturallaw/2018/06/buy-sell-agreements-for-family-businesses.html

When is an Informal Business Arrangement a Partnership?

https://lawprofessors.typepad.com/agriculturallaw/2018/07/when-is-an-informal-business-arrangement-a-partnership.html

Management Activities and the Passive Loss Rules

https://lawprofessors.typepad.com/agriculturallaw/2018/07/management-activities-and-the-passive-loss-rules.html

Expense Method Depreciation and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2018/08/expense-method-depreciation-and-trusts.html

Qualified Business Income Deduction – Proposed Regulations

  https://lawprofessors.typepad.com/agriculturallaw/2018/08/qualified-business-income-deduction-proposed-regulations.html

Intentionally Defective Grantor Trust – What is it and How Does it Work?

https://lawprofessors.typepad.com/agriculturallaw/2018/08/intentionally-defective-grantor-trust-what-is-it-and-how-does-it-work.html

When Can a Corporate Shareholder be Held Liable for Corporate Debts and Liabilities?

https://lawprofessors.typepad.com/agriculturallaw/2018/09/when-can-a-corporate-shareholder-be-held-liable-for-corporate-debts-and-liabilities.html

Farm Wealth Transfer and Business Succession – The GRAT

https://lawprofessors.typepad.com/agriculturallaw/2018/09/farm-wealth-transfer-and-business-succession-the-grat.html

Social Security Planning for Farmers

https://lawprofessors.typepad.com/agriculturallaw/2018/10/social-security-planning-for-farmers.html

Corporations Post-TCJA and Anti-Corporate Farming Laws

https://lawprofessors.typepad.com/agriculturallaw/2018/10/corporations-post-tcja-and-anti-corporate-farming-laws.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

What Happens When a Partner Dies?

https://lawprofessors.typepad.com/agriculturallaw/2018/10/what-happens-when-a-partner-dies.html

What are the Tax Consequences on Sale or Exchange of a Partnership Interest?

https://lawprofessors.typepad.com/agriculturallaw/2018/12/what-are-the-tax-consequences-on-sale-or-exchange-of-a-partnership-interest.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

CIVIL LIABILITIES

The “Almost Top Ten” Agricultural Law and Tax Developments of 2017

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-almost-top-ten-agricultural-law-and-tax-developments-of-2017.html

Landlord Liability for Injuries Occurring on Leased Premises

https://lawprofessors.typepad.com/agriculturallaw/2018/03/landlord-liability-for-injuries-occurring-on-leased-premises.html

When Does a Rule of Strict Liability Apply on the Farm?

https://lawprofessors.typepad.com/agriculturallaw/2018/03/when-does-a-rule-of-strict-liability-apply-on-the-farm.html

When Can I Shoot My Neighbor’s Dog?

https://lawprofessors.typepad.com/agriculturallaw/2018/05/when-can-i-shoot-my-neighbors-dog.html

Reasonable Foreseeability

https://lawprofessors.typepad.com/agriculturallaw/2018/05/reasonable-foreseeability.html

What is “Agriculture” for Purposes of Agritourism?

https://lawprofessors.typepad.com/agriculturallaw/2018/05/what-is-agriculture-for-purposes-of-agritourism.html

Negligence – Can You Prove Liability?

https://lawprofessors.typepad.com/agriculturallaw/2018/06/negligence-can-you-prove-liability.html

Wind Farm Nuisance Matter Resolved – Buy the Homeowners Out!

https://lawprofessors.typepad.com/agriculturallaw/2018/06/wind-farm-nuisance-matter-resolved-buy-the-homeowners-out.html

Torts Down on the Farm

            https://lawprofessors.typepad.com/agriculturallaw/2018/08/torts-down-on-the-farm.html

Roadkill – It’s What’s for Dinner

https://lawprofessors.typepad.com/agriculturallaw/2018/09/roadkill-its-whats-for-dinner.html

What Difference Does it Make if I Post My Property “No Trespassing”?

https://lawprofessors.typepad.com/agriculturallaw/2018/09/what-difference-does-it-make-if-i-post-my-property-no-trespassing.html

Liability for Injuries Associated with Horses

https://lawprofessors.typepad.com/agriculturallaw/2018/10/liability-for-injuries-associated-with-horses.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Developments in Ag Law and Tax

https://lawprofessors.typepad.com/agriculturallaw/2018/11/developments-in-ag-law-and-tax.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

CONTRACTS

Is a Farmer a Merchant?  Why it Might Matter

https://lawprofessors.typepad.com/agriculturallaw/2018/02/is-a-farmer-a-merchant-why-it-might-matter.html

Some Thoughts on the Importance of Leasing Farmland

https://lawprofessors.typepad.com/agriculturallaw/2018/02/some-thoughts-on-the-importance-of-leasing-farmland.html

Contract Rescission – When Can You Back Out of a Deal?

https://lawprofessors.typepad.com/agriculturallaw/2018/06/contract-rescission-when-can-you-back-out-of-a-deal.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Disclaiming Implied Warranties

https://lawprofessors.typepad.com/agriculturallaw/2018/11/disclaiming-implied-warranties.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

COOPERATIVES

The Qualified Business Income (QBI) Deduction – What a Mess!

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-qualified-business-income-qbi-deduction-what-a-mess.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

CRIMINAL LIABILITIES

Curtilage – How Much Ag Property is Protected from a Warrantless Search?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/curtilage-how-much-ag-property-is-protected-from-a-warrantless-search.html

Establishing the Elements of a Cruelty to Animals Charge

https://lawprofessors.typepad.com/agriculturallaw/2018/07/establishing-the-elements-of-a-cruelty-to-animals-charge.html

What Difference Does it Make if I Post My Property “No Trespassing”?

https://lawprofessors.typepad.com/agriculturallaw/2018/09/what-difference-does-it-make-if-i-post-my-property-no-trespassing.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

ENVIRONMENTAL LAW

The “Almost Top Ten” Agricultural Law and Tax Developments of 2017

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-almost-top-ten-agricultural-law-and-tax-developments-of-2017.html

Top Ten Agricultural Law and Tax Developments of 2017 (Five through One)

https://lawprofessors.typepad.com/agriculturallaw/2018/01/top-ten-agricultural-law-and-tax-developments-of-2017-five-through-one.html

Is a CWA Permit Needed for Pollution Discharges via Groundwater?

https://lawprofessors.typepad.com/agriculturallaw/2018/03/is-a-cwa-permit-needed-for-pollution-discharges-via-groundwater.html

Non-Tax Ag Provisions and the Omnibus Bill

https://lawprofessors.typepad.com/agriculturallaw/2018/04/non-tax-ag-provisions-in-the-omnibus-bill.html

Wetlands and Farm Programs – Does NRCS Understand the Rules?

https://lawprofessors.typepad.com/agriculturallaw/2018/06/wetlands-and-farm-programs-does-nrcs-understand-the-rules.html

Regulation of Wetlands and “Ipse Dixit” Determinations

https://lawprofessors.typepad.com/agriculturallaw/2018/07/regulation-of-wetlands-and-ipse-dixit-determinations.html

WOTUS Developments

            https://lawprofessors.typepad.com/agriculturallaw/2018/08/wotus-developments.html

Does the Migratory Bird Treaty Act Apply to Farmers?

https://lawprofessors.typepad.com/agriculturallaw/2018/08/does-the-migratory-bird-treaty-act-apply-to-farmers.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Is Groundwater a “Point Source” Pollutant?

https://lawprofessors.typepad.com/agriculturallaw/2018/10/is-groundwater-a-point-source-pollutant.html

“Waters of the United States” Means “Frozen Soil”?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/waters-of-the-united-states-means-frozen-soil.html

Developments in Ag Law and Tax

https://lawprofessors.typepad.com/agriculturallaw/2018/11/developments-in-ag-law-and-tax.html

Can an Endangered Species be Protected in Areas Where it Can’t Survive?

https://lawprofessors.typepad.com/agriculturallaw/2018/12/can-an-endangered-species-be-protected-in-areas-where-it-cant-survive.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

ESTATE PLANNING

The “Almost Top Ten” Agricultural Law and Tax Developments of 2017

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-almost-top-ten-agricultural-law-and-tax-developments-of-2017.html

The Tax Cuts and Job Acts – How Does it Impact Estate Planning?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-tax-cuts-and-jobs-act-how-does-it-impact-estate-planning.html

What’s the Charitable Deduction for Donations From a Trust?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/whats-the-charitable-deduction-for-donations-from-a-trust.html

The Spousal Qualified Joint Venture

https://lawprofessors.typepad.com/agriculturallaw/2018/02/the-spousal-qualified-joint-venture.html

Why Clarity in Will/Trust Language Matters

https://lawprofessors.typepad.com/agriculturallaw/2018/02/why-clarity-in-willtrust-language-matters.html

Some Thoughts on the Importance of Leasing Farmland

https://lawprofessors.typepad.com/agriculturallaw/2018/02/some-thoughts-on-the-importance-of-leasing-farmland.html

End of Tax Preparation Season Means Tax Seminar Season is About to Begin

https://lawprofessors.typepad.com/agriculturallaw/2018/04/end-of-tax-preparation-season-means-tax-seminar-season-is-about-to-begin.html

Modifying an Irrevocable Trust – Decanting

https://lawprofessors.typepad.com/agriculturallaw/2018/04/modifying-an-irrevocable-trust-decanting.html

Valuation Discounting – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2018/05/valuation-discounting-part-two.html

The Impact of the TCJA on Estates and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2018/05/the-impact-of-the-tcja-on-estates-and-trusts.html

Impact of Post-Death Events on Valuation

https://lawprofessors.typepad.com/agriculturallaw/2018/06/impact-of-post-death-events-on-valuation.html

Beneficiary Designations, Changed Circumstances and the Contracts Clause

https://lawprofessors.typepad.com/agriculturallaw/2018/07/beneficiary-designations-changed-circumstances-and-the-contracts-clause.html

Qualified Business Income Deduction – Proposed Regulations

https://lawprofessors.typepad.com/agriculturallaw/2018/08/qualified-business-income-deduction-proposed-regulations.html

Spousal Joint Tendencies and Income Tax Basis

https://lawprofessors.typepad.com/agriculturallaw/2018/09/spousal-joint-tenancies-and-income-tax-basis.html

Farm and Ranch Estate Planning in 2018 and Forward

https://lawprofessors.typepad.com/agriculturallaw/2018/10/farm-and-ranch-estate-planning-in-2018-and-forward.html

The TCJA, Charitable Giving and a Donor-Advised Fund

https://lawprofessors.typepad.com/agriculturallaw/2018/10/the-tcja-charitable-giving-and-a-donor-advised-fund.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Unpaid Tax at Death – How Long Does IRS Have to Collect?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/unpaid-tax-at-death-how-long-does-irs-have-to-collect.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

INCOME TAX

The “Almost Top Ten” Agricultural Law and Tax Developments of 2017

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-almost-top-ten-agricultural-law-and-tax-developments-of-2017.html

Top Ten Agricultural Law and Tax Developments of 2017 (Five through One)

https://lawprofessors.typepad.com/agriculturallaw/2018/01/top-ten-agricultural-law-and-tax-developments-of-2017-five-through-one.html

The Qualified Business Income (QBI) Deduction – What a Mess!

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-qualified-business-income-qbi-deduction-what-a-mess.html

The Tax Cuts and Jobs Act – How Does it Impact Estate Planning?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-tax-cuts-and-jobs-act-how-does-it-impact-estate-planning.html

What’s the Charitable Deduction for Donations from a Trust?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/whats-the-charitable-deduction-for-donations-from-a-trust.html

Can Farmers Currently Deduct Research Expenditures?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/can-farmers-currently-deduct-research-expenditures.html

Innovation on the Farm – Will the Research and Development Credit Apply?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/innovation-on-the-farm-will-the-research-and-development-credit-apply.html

What Happens When the IRS Deems an Ag Activity to Be a Hobby?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/what-happens-when-the-irs-deems-an-ag-activity-to-be-a-hobby.html

The Spousal Qualified Joint Venture – Implications for Self-Employment Tax and Federal Farm Program Payment Limitations

https://lawprofessors.typepad.com/agriculturallaw/2018/02/the-spousal-qualified-joint-venture-implications-for-self-employment-tax-and-federal-farm-program-payment-limitations.html

Livestock Sold or Destroyed Because of Disease

https://lawprofessors.typepad.com/agriculturallaw/2018/02/livestock-sold-or-destroyed-because-of-disease.html

Form a C Corporation – The New Vogue in Business Structure?

https://lawprofessors.typepad.com/agriculturallaw/2018/02/form-a-c-corporation-the-new-vogue-in-business-structure.html

Deductible Repairs Versus Capitalization

https://lawprofessors.typepad.com/agriculturallaw/2018/03/deductible-repairs-versus-capitalization.html

The Tax Treatment of Farming Net Operating Losses

https://lawprofessors.typepad.com/agriculturallaw/2018/03/the-tax-treatment-of-farming-net-operating-losses.html

Congress Modifies the Qualified Business Income Deduction

https://lawprofessors.typepad.com/agriculturallaw/2018/03/congress-modifies-the-qualified-business-income-deduction.html

IRS Collections – The Basics

https://lawprofessors.typepad.com/agriculturallaw/2018/03/irs-collections-the-basics-.html

Tax Issues Associated with Oil and Gas Production

https://lawprofessors.typepad.com/agriculturallaw/2018/03/tax-issues-associated-with-oil-and-gas-production.html

Refundable Fuel Credits – Following the Rules Matters

https://lawprofessors.typepad.com/agriculturallaw/2018/04/refundable-fuel-credits-following-the-rules-matters.html

Distinguishing Between a Capital Lease and an Operating Lease

https://lawprofessors.typepad.com/agriculturallaw/2018/04/distinguishing-between-a-capital-lease-and-an-operating-lease.html

End of Tax Preparation Season Means Tax Seminar Season is About to Begin

https://lawprofessors.typepad.com/agriculturallaw/2018/04/end-of-tax-preparation-season-means-tax-seminar-season-is-about-to-begin.html

Passive Activities and Grouping

https://lawprofessors.typepad.com/agriculturallaw/2018/04/passive-activities-and-grouping.html

Divorce and the New Tax Law – IRS Grants Some Relief

https://lawprofessors.typepad.com/agriculturallaw/2018/04/divorce-and-the-new-tax-law-irs-grants-some-relief.html

Gifts of Ag Commodities to Children and the New Tax Law

https://lawprofessors.typepad.com/agriculturallaw/2018/04/gifts-of-ag-commodities-to-children-and-the-new-tax-law.html

Post-Death Sale of Crops and Livestock

https://lawprofessors.typepad.com/agriculturallaw/2018/04/post-death-sale-of-crops-and-livestock.html

Is There a Downside Risk to E-Filing Your Taxes?

https://lawprofessors.typepad.com/agriculturallaw/2018/05/is-there-a-downside-risk-to-e-filing-your-taxes.html

Purchase and Sale Allocations to CRP Contracts

https://lawprofessors.typepad.com/agriculturallaw/2018/05/purchase-and-sale-allocations-to-crp-contracts.html

Converting a C Corporation to an S Corporation – The Problem of Passive Income

https://lawprofessors.typepad.com/agriculturallaw/2018/05/converting-a-c-corporation-to-an-s-corporation-the-problem-of-passive-income.html

The Impact of the TCJA on Estates and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2018/05/the-impact-of-the-tcja-on-estates-and-trusts.html

The TCJA and I.R.C. 529 Plans

https://lawprofessors.typepad.com/agriculturallaw/2018/05/the-tcja-and-irc-529-plans.html

Farmers, Self-Employment Tax, and Personal Property Leases

https://lawprofessors.typepad.com/agriculturallaw/2018/06/farmers-self-employment-tax-and-personal-property-leases.html

State Taxation of Online Sales

https://lawprofessors.typepad.com/agriculturallaw/2018/06/state-taxation-of-online-sales.html

The Depletion Deduction for Oil and Gas Operations

https://lawprofessors.typepad.com/agriculturallaw/2018/07/the-depletion-deduction-for-oil-and-gas-operations.html

Charitable Giving Post-2017

https://lawprofessors.typepad.com/agriculturallaw/2018/07/charitable-giving-post-2017.html

When is an Informal Business Arrangement a Partnership?

https://lawprofessors.typepad.com/agriculturallaw/2018/07/when-is-an-informal-business-arrangement-a-partnership.html

Management Activities and the Passive Loss Rules

https://lawprofessors.typepad.com/agriculturallaw/2018/07/management-activities-and-the-passive-loss-rules.html

Tax Issues on Repossession of Farmland

https://lawprofessors.typepad.com/agriculturallaw/2018/07/tax-issues-on-repossession-of-farmland.html

Outline of Tax Proposals Released

https://lawprofessors.typepad.com/agriculturallaw/2018/07/outline-of-tax-proposals-released.html

Life Estate/Remainder Arrangements and Income Tax Basis

https://lawprofessors.typepad.com/agriculturallaw/2018/08/life-estateremainder-arrangements-and-income-tax-basis-.html

Expense Method Depreciation and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2018/08/expense-method-depreciation-and-trusts.html

Qualified Business Income Deduction – Proposed Regulations

https://lawprofessors.typepad.com/agriculturallaw/2018/08/qualified-business-income-deduction-proposed-regulations.html

The Qualified Business Income Deduction and “W-2 Wages”

https://lawprofessors.typepad.com/agriculturallaw/2018/08/the-qualified-business-income-deduction-and-w-2-wages.html

Tax Consequences on Partition and Sale of Land

https://lawprofessors.typepad.com/agriculturallaw/2018/09/tax-consequences-on-partition-and-sale-of-land.html

Deducting Residual Soil Fertility

https://lawprofessors.typepad.com/agriculturallaw/2018/09/deducting-residual-soil-fertility.html

Social Security Planning for Farmers

https://lawprofessors.typepad.com/agriculturallaw/2018/10/social-security-planning-for-farmers.html

Eliminating Capital Gain Tax – Qualified Opportunity Zones

https://lawprofessors.typepad.com/agriculturallaw/2018/10/eliminating-capital-gain-tax-qualified-opportunity-zones.html

The TCJA, Charitable Giving and a Donor-Advised Fund

https://lawprofessors.typepad.com/agriculturallaw/2018/10/the-tcja-charitable-giving-and-a-donor-advised-fund.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

What is Depreciable Farm Real Property?

https://lawprofessors.typepad.com/agriculturallaw/2018/10/what-is-depreciable-farm-real-property.html

What is “Like-Kind” Real Estate?

https://lawprofessors.typepad.com/agriculturallaw/2018/10/what-is-like-kind-real-estate.html

Developments in Ag Law and Tax

https://lawprofessors.typepad.com/agriculturallaw/2018/11/developments-in-ag-law-and-tax.html

Trusts and Like-Kind Exchanges

https://lawprofessors.typepad.com/agriculturallaw/2018/11/trusts-and-like-kind-exchanges.html

Unpaid Tax at Death – How Long Does IRS Have to Collect?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/unpaid-tax-at-death-how-long-does-irs-have-to-collect.html

Non-Depreciable Items on the Farm or Ranch

https://lawprofessors.typepad.com/agriculturallaw/2018/11/non-depreciable-items-on-the-farm-or-ranch.html

What are the Tax Consequences on Sale or Exchange of a Partnership Interest?

https://lawprofessors.typepad.com/agriculturallaw/2018/12/what-are-the-tax-consequences-on-sale-or-exchange-of-a-partnership-interest.html

Expense Method Depreciation and Structures on the Farm

https://lawprofessors.typepad.com/agriculturallaw/2018/12/expense-method-depreciation-and-structures-on-the-farm.html

Deduction Costs Associated with Items Purchased for Resale

https://lawprofessors.typepad.com/agriculturallaw/2018/12/sale-of-items-purchased-for-resale.html

Claiming Business Deductions? – Maintain Good Records, and… Hire a Tax Preparer

            https://lawprofessors.typepad.com/agriculturallaw/income-tax/page/7/

Depletion – What is it and When is it Available?

https://lawprofessors.typepad.com/agriculturallaw/2018/12/depletion-what-is-it-and-when-is-it-available.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

INSURANCE

Beneficiary Designations, Changed Circumstances and the Contracts Clause

https://lawprofessors.typepad.com/agriculturallaw/2018/07/beneficiary-designations-changed-circumstances-and-the-contracts-clause.html

Recent Developments Involving Crop Insurance

https://lawprofessors.typepad.com/agriculturallaw/2018/08/recent-developments-involving-crop-insurance.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Farm Liability Policies – Are All Activities on the Farm Covered?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/farm-liability-policies-are-all-activities-on-the-farm-covered.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

REAL PROPERTY

In-Kind Partition and Adverse Possession – Two Important Concepts in Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2018/01/in-kind-partition-and-adverse-possession-two-important-concepts-in-agriculture.html

Some Thoughts on the Importance of Leasing Farmland

https://lawprofessors.typepad.com/agriculturallaw/2018/02/some-thoughts-on-the-importance-of-leasing-farmland.html

Prescriptive Easements and Adverse Possession – Obtaining Title to Land Without Paying for It

https://lawprofessors.typepad.com/agriculturallaw/2018/03/prescriptive-easements-and-adverse-possession-obtaining-title-to-land-without-paying-for-it.html

Purchase and Sale Allocations to CRP Contracts

https://lawprofessors.typepad.com/agriculturallaw/2018/05/purchase-and-sale-allocations-to-crp-contracts.html

Tax Issues on Repossession of Farmland

https://lawprofessors.typepad.com/agriculturallaw/2018/07/tax-issues-on-repossession-of-farmland.html

The Accommodation Doctrine – Working Out Uses Between Surfaces and Subsurface Owners

https://lawprofessors.typepad.com/agriculturallaw/2018/09/the-accommodation-doctrine-working-out-uses-between-surface-and-subsurface-owners.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

What is “Like-Kind” Real Estate?

https://lawprofessors.typepad.com/agriculturallaw/2018/10/what-is-like-kind-real-estate.html

Negative Easements – Is There a Right to Unobstructed Light, Air, or View?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/negative-easements-is-their-a-right-to-unobstructed-light-air-or-view.html

 The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

REGULATORY LAW

The “Almost Top Ten” Agricultural Law and Tax Developments of 2017

https://lawprofessors.typepad.com/agriculturallaw/2018/01/the-almost-top-ten-agricultural-law-and-tax-developments-of-2017.html

Top Ten Agricultural Law and Tax Developments of 2017 (Ten through Six)

https://lawprofessors.typepad.com/agriculturallaw/2018/01/top-ten-agricultural-law-and-tax-developments-of-2017-ten-through-six.html

Is There a Constitutional Way to Protect Animal Ag Facilities?

https://lawprofessors.typepad.com/agriculturallaw/2018/01/is-there-a-constitutional-way-to-protect-animal-ag-facilities.html

Trade Issues and Tariffs – Are Agriculture’s Concerns Legitimate?

https://lawprofessors.typepad.com/agriculturallaw/2018/03/trade-issues-and-tariffs-are-agricultures-concerns-legitimate.html

Federal Crop Insurance – Some Recent Case Developments

https://lawprofessors.typepad.com/agriculturallaw/2018/04/federal-crop-insurance-some-recent-case-developments.html

Non-Tax Ag Provisions in the Omnibus Bill

https://lawprofessors.typepad.com/agriculturallaw/2018/04/non-tax-ag-provisions-in-the-omnibus-bill.html

Are Mandatory Assessments for Generic Advertising of Ag Commodities Constitutional?

https://lawprofessors.typepad.com/agriculturallaw/2018/06/are-mandatory-assessments-for-generic-advertising-of-ag-commodities-constitutional.html

Wind Farm Nuisance Matter Resolved – Buy the Homeowners Out!

https://lawprofessors.typepad.com/agriculturallaw/2018/06/wind-farm-nuisance-matter-resolved-buy-the-homeowners-out.html

Regulation of Wetlands and “Ipse Dixit” Determinations

https://lawprofessors.typepad.com/agriculturallaw/2018/07/regulation-of-wetlands-and-ipse-dixit-determinations.html

Ag Employment – Verifying the Legal Status of Employees

https://lawprofessors.typepad.com/agriculturallaw/2018/08/ag-employment-verifying-the-legal-status-of-employees.html

Roadkill – It’s What’s for Dinner

https://lawprofessors.typepad.com/agriculturallaw/2018/09/roadkill-its-whats-for-dinner.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

“Waters of the United States” Means “Frozen Soil”?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/waters-of-the-united-states-means-frozen-soil.html

How Long Can a Train Block a Crossing?

https://lawprofessors.typepad.com/agriculturallaw/2018/11/how-long-can-a-train-block-a-crossing.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html  

SECURED TRANSACTIONS

Ag Finance – Getting the Debtor’s Name Correct on the Financing Statements

https://lawprofessors.typepad.com/agriculturallaw/2018/02/ag-finance-getting-the-debtors-name-correct-on-the-financing-statement.html

What Are “Proceeds” of Crops and Livestock?

https://lawprofessors.typepad.com/agriculturallaw/2018/09/what-are-proceeds-of-crops-and-livestock.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html

SEMINARS AND CONFERENCES

Agricultural Law and Economics Conference

https://lawprofessors.typepad.com/agriculturallaw/2018/07/agricultural-law-and-economics-conference.html

Summer Farm Income Tax/Estate and Business Planning Conference

https://lawprofessors.typepad.com/agriculturallaw/2018/02/summer-farm-income-taxestate-and-business-planning-conference.html

Upcoming Seminars

            https://lawprofessors.typepad.com/agriculturallaw/2018/08/upcoming-seminars.html

Fall Tax Seminars

            https://lawprofessors.typepad.com/agriculturallaw/2018/09/fall-tax-seminars.html

Year-End Ag Tax Seminar/Webinar

https://lawprofessors.typepad.com/agriculturallaw/2018/12/year-end-ag-tax-seminarwebinar.html

WATER LAW

Top Ten Agricultural Law and Tax Developments of 2017 (Ten through Six)

https://lawprofessors.typepad.com/agriculturallaw/2018/01/top-ten-agricultural-law-and-tax-developments-of-2017-ten-through-six.html

Top Ten Agricultural Law and Tax Developments of 2017 (Five through One)

https://lawprofessors.typepad.com/agriculturallaw/2018/01/top-ten-agricultural-law-and-tax-developments-of-2017-five-through-one.html

The Accommodation Doctrine – Working on Uses Between Surface and Subsurface Owners

https://lawprofessors.typepad.com/agriculturallaw/2018/09/the-accommodation-doctrine-working-out-uses-between-surface-and-subsurface-owners.html

Agricultural Law Online!

            https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html

Drainage Issues – Rules for Handling Excess Surface Water

https://lawprofessors.typepad.com/agriculturallaw/2018/12/drainage-issues-rules-for-handling-excess-surface-water.html

The “Almost Top Ten” Ag Law and Tax Developments of 2018

https://lawprofessors.typepad.com/agriculturallaw/2018/12/the-almost-top-ten-ag-law-and-tax-developments-of-2018.html  

March 21, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Friday, March 19, 2021

August National Farm Tax and Estate/Business Planning Conference

Overview

On August 2-3, in Missoula, Montana, at the Hilton Garden Inn, Washburn Law School will hold the second of two summer 2021 national conferences focusing on farm and ranch income tax and farm and ranch estate/business planning.  This first of the two national conference is in Ohio on June 7-8.  You may read about the details of that event here: https://lawprofessors.typepad.com/agriculturallaw/2021/03/june-national-farm-tax-and-estatebusiness-planning-conference.html.    

These are great conferences for attorneys, CPAs and other tax practitioners, agribusiness professionals, farmers, and others interested in learning more about the legal and tax issues associated with income tax planning and management and estate and business planning for those engaged in the trade or business of farming.

The August 2-3 Monana conference – it’s the topic of today’s post.

Day 1 Agenda

On Monday, August 2, our focus will be on farm income tax issues.  Joining me for the day is Paul Neiffer, a Principal (Agribusiness) with CliftonLarsonAllen, LLP.  Paul and I have worked together on the seminar circuit for a number of years and enjoy teaching together to farm tax audiences.  Many of you know of Paul via his Farm CPA Today blog. 

I will begin Day 1 with an update on what’s been happening in the courts and IRS/Treasury that has implications for those engaged in farming.  Paul will then address the lingering issues with the Employee Retention Credit (ERC) and the Paycheck Protection Program (PPP) and the varied client situations and questions that arose during the 2020 tax season.  The morning session will then continue with coverage of various miscellaneous topics – NOL rules; like-kind exchanges; amending partnership returns; oil and gas taxation basics.  Paul will then conclude the morning with a discussion of the final I.R.C. §199A regulations. 

After the luncheon, Matthew Bohlmann, the IRS-CI Senior Analyst National Coordinator for the Identity Theft program under Cyber Crimes-Headquarters, will explain how to protect your practice and your clients against cyber threats and tax fraud, and steps that your offices can take to protect client data.  After Matt’s session, Paul and I will address various tax and entity structuring issues relevant to maximizing federal farm program payments for farmers.  Then, I will take a dive into the tax legislation and policy arena to assess what has happened and what might happen in the near future that impacts tax planning. 

Day 2 Agenda

On Tuesday, August 3, we change our focus to the estate and business planning side of things.  2021 is a big year for potential change in this area of the law, with huge implications for farm and ranch clients (and others).  What is going to happen with the level of the estate tax exemption? What about the present interest annual exclusion?  Will corporate tax rates change?  Will the QBID be eliminated?  What’s the IRS doing with the partnership audit rules?  Should a client’s business organizational form be changed?  The answers to all of these questions are up in the air right now.  But each one of them is critically important.

I will begin Day 2 with an overview of caselaw and IRS administrative and regulatory developments.  Following my update session, Dr. Gary Brester, an Emeritus Professor in the Department of Ag Econ at Montana St. University will address how farmers and ranchers can maintain competitiveness for success.  What’s the impact and role of technology on production agriculture?  What’s the current status of the U.S. food and fiber sector?  Dr. Brester will address these and other issues during his presentation.  It is always a good idea to be in tune with the economic environment that clients function in.  Doing so helps anticipate legal and tax issues that might arise and provides planning opportunities that otherwise might be missed. 

After the morning break, I will touch on some selected issues with respect to the special use valuation election that can be made on a farmer/rancher’s estate tax return.  This is a very complex provision of the Code, and it may be back in “vogue” again if the federal estate tax exemption is reduced from its current level.  To round out the morning, I will discuss corporate reorganizations.  Of course, this topic is being driven by the possibility of changes in the law that could impact how the farming or ranching operation should be structured.  A major focus will be on divisive reorganizations. 

After the luncheon, Robert Moore, an attorney practicing near Columbus, Ohio will continue the discussion of the use of business entities in farm succession planning.  Mr. Moore has a focus on estate and business planning for farmers in his practice.  He will address several strategies for succession planning and how to keep the family in the farm for subsequent generations. 

Following the afternoon break, Katherine Merck of the Falen Law Offices of Cheyenne, Wyoming, will address property law issues that arise in the process of transitioning the farm/ranch business to the next generation.  Many real estate issues can arise in the business succession process including easements on land; water and grazing rights; and details with respect to legal descriptions, just to name a few. 

The concluding session of Day 2 will be an hour of ethics by Prof. Shawn Leisinger from the law school.  This session will an interactive session with attendees involving ethical issues surrounding clients with end-of-life decisions that need to be made by the client and family members.  This is a very important topic that practitioners often have to deal with and some rather thorny ethical issues must be dealt with.

Online Attendance

If you can’t make the conference in-person, both days will be live simulcast over the web.  You will be able to interact with the speakers by asking questions and hearing responses. 

Location

The conference will be held at the Hilton Garden Inn in Missoula.  Missoula is located near some of the most beautiful parts of the United States.  Missoula is located between Glacier National Park and Yellowstone National Park, and is also near the Bitterroot Mountain Range and Lolo Pass.  There are plenty of sight-seeing and vacation opportunities that can be wrapped around the event. 

Room Block

A room block has been established for the weekend before the conference and through the conference. 

Rates

The fee for the conference varies depending on whether you are claiming continuing education credit.  If not, the registration rate is lower.  We welcome farmers, ranchers and others that don’t need continuing education credit to attend along with those that will be claiming professional education credit.

Additional Sponsors

As of today, we are thankful for the sponsorship of the First State Bank of Nebraska; the Falen Law Offices of Cheyenne, Wyoming, Agrilegacy and Base.  You may learn more about the sponsors here: 

https://www.1fsb.bank/

https://buddfalen.com/

http://agrilegacy.com/

https://www.baseonline.com/

If you are interested in becoming a sponsor, please contact me.  It’s a great way to market your business.

More Information

You can learn more about the August conference and register here:  https://www.washburnlaw.edu/employers/cle/farmandranchtaxaugust.html

Conclusion

I hope to see you at one of the conferences this summer or, if not, I hope that you are able to attend online.  This content and discussion will be valuable to your practice and/or farming or ranching operation.

March 19, 2021 in Business Planning, Estate Planning, Income Tax | Permalink | Comments (0)

Friday, March 5, 2021

June National Farm Tax and Estate/Business Planning Conference

Overview

On June 7-8 at the Shawnee State Park Lodge and Conference Center near West Portsmouth, Ohio, Washburn Law School will hold the first of two summer 2021 national conferences focusing on farm income tax and farmer estate/business planning.  The second event will be August 2-3 in Missoula, Montana.  These are great conferences for attorneys, CPAs and other tax practitioners, agribusiness professionals, farmers, and others interested in learning more about the legal and tax issues associated with income tax planning and management and estate and business planning for those engaged in the trade or business of farming.

The June 7-8 Ohio conference – it’s the topic of today’s post.

Day 1 Agenda

On Monday, June 7, our focus will be on farm income tax issues.  Joining me for the day is Paul Neiffer, a Principal (Agribusiness) with CliftonLarsonAllen, LLP.  Paul and I have worked together on the seminar circuit for a number of years and enjoy teaching together to farm tax audiences.  Many of you know of Paul via his Farm CPA Today blog. 

I will begin Day 1 with an update on what’s been happening in the courts and IRS/Treasury that has implications for those engaged in farming.  Paul will then address the lingering issues with the Employee Retention Credit (ERC) and the Paycheck Protection Program (PPP) and the varied client situations and questions that arose during the 2020 tax season.  The morning session will then continue with coverage of various miscellaneous topics – NOL rules; like-kind exchanges; amending partnership returns; oil and gas taxation basics.  Paul will then conclude the morning with a discussion of the final I.R.C. §199A regulations. 

After the luncheon, Matthew Bohlmann, the IRS-CI Senior Analyst National Coordinator for the Identity Theft program under Cyber Crimes-Headquarters, will explain how to protect your practice and your clients against cyber threats and tax fraud, and steps that your offices can take to protect client data.  After Matt’s session, Paul and I will address various tax and entity structuring issues relevant to maximizing federal farm program payments for farmers.  Then, I will take a dive into the tax legislation and policy arena to assess what has happened and what might happen in the near future that impacts tax planning. 

Day 2 Agenda

On Tuesday, June 8, we change our focus to the estate and business planning side of things.  2021 is a big year for potential change in this area of the law, with huge implications for farm and ranch clients (and others).  What is going to happen with the level of the estate tax exemption? What about the present interest annual exclusion?  Will corporate tax rates change?  Will the QBID be eliminated?  What’s the IRS doing with the partnership audit rules?  Should a client’s business organizational form be changed?  The answers to all of these questions are up in the air right now.  But each one of them is critically important.

I will begin Day 2 with an overview of caselaw and IRS administrative and regulatory developments.  Following my update session, Dr. William Snell from the University of Kentucky Ag Econ Department will provide his insights into the current status of the farm economy.  It is always a good idea to be in tune with the economic environment that clients function in.  That helps anticipate legal and tax issues that might arise and provides planning opportunities that otherwise might be missed.  After the morning break, I will touch on some selected issues with respect to the special use valuation election that can be made on a farmer/rancher’s estate tax return.  This is a very complex provision of the Code, and it may be back in “vogue” again if the federal estate tax exemption is reduced from its current level.  To round out the morning, I will discuss corporate reorganizations.  Of course, this topic is being driven by the possibility of changes in the law that could impact how the farming or ranching operation should be structured.  A major focus will be on divisive reorganizations. 

After the luncheon, Robert Moore, an attorney practicing near Columbus, Ohio will continue the discussion of the use of business entities in farm succession planning.  Mr. Moore has a focus on estate and business planning for farmers in his practice.  He will address several strategies for succession planning and how to keep the family in the farm for subsequent generations.  Following the afternoon break I will go through the issues facing farmers in financial distress and provide some insight into strategies for managing tax and legal issues that are inherent in such situations. 

The concluding session of Day 2 will be an hour of ethics by Prof. Shawn Leisinger from the law school.  This session will an interactive session with attendees involving ethical issues surrounding clients with end-of-life decisions that need to be made by the client and family members.  This is a very important topic that practitioners often have to deal with and some rather thorny ethical issues must be dealt with.

Online Attendance

If you can’t make the conference in-person, both days will be live simulcast over the web.  You will be able to interact with the speakers by asking questions and hearing responses. 

Location

The conference will be held at the Shawnee State Park Lodge and Conference Center in southern Ohio near West Portsmouth Ohio.  The location is almost equally distanced from Lexington, KY, Columbus, OH and Cincinnati, OH.  If you will be flying in, flights into any of those airports would be your best choice. 

Room Block

A room block has been established for the weekend before the conference and through the conference. 

Rates

The fee for the conference varies depending on whether you are claiming continuing education credit.  If not, the registration rate is lower.  We welcome farmers, ranchers and others that don’t need continuing education credit to attend along with those that will be claiming professional education credit.

Additional Sponsors

As of today, we are thankful for the sponsorship of the Wright and Moore Law Company of Delaware, OH, and AgriLegacy.  You may learn more about the Wright and Moore Law Company here: https://www.ohiofarmlaw.com/ and AgriLegacy here: https://agrilegacy.com/  If you are interested in becoming a sponsor, please contact me.

More Information

You can learn more about the conference and register here:  https://washburnlaw.edu/employers/cle/farmandranchtaxjune.html

August Conference

On August 2-3 we will conduct the second of the two summer conferences in Missoula, MT.  The program agenda there will be slightly different, and I will do a separate post on that conference next week.  That conference will also be simulcast over the web for those unable to attend in person.

Conclusion

I hope to see you at one of the conferences this summer or, if not, I hope that you are able to attend online.  This content and discussion will be valuable to your practice and/or farming or ranching operation.

March 5, 2021 in Business Planning, Estate Planning, Income Tax | Permalink | Comments (0)

Sunday, February 28, 2021

Ag Law and Taxation - 2019 Bibliography

Overview

Today's post is a bibliography of my ag law and tax blog articles of 2019.  Many of you have requested that I provide something like this to make it easier to find the articles, and last month I posted the bibliography of the 2020 articles.  Soon I will post the bibliography of the 2018 articles and then 2017 and 2016. 

The library of content is piling up.

Cataloging the 2019 ag law and tax blog articles - it's the topic of today's post.

BANKRUPTCY

Non-Dischargeable Debts in Bankruptcy

https://lawprofessors.typepad.com/agriculturallaw/2019/02/non-dischargeable-debts-in-bankruptcy.html

Developments in Agricultural Law and Taxation

https://lawprofessors.typepad.com/agriculturallaw/2019/03/developments-in-agricultural-law-and-taxation.html

More Recent Developments in Agricultural Law

https://lawprofessors.typepad.com/agriculturallaw/2019/03/more-recent-developments-in-agricultural-law.html

More Ag Law and Tax Developments

https://lawprofessors.typepad.com/agriculturallaw/2019/05/more-ag-law-and-tax-developments.html

Farmers, Bankruptcy and the “Absolute Priority” Rule

https://lawprofessors.typepad.com/agriculturallaw/2019/07/farmers-bankruptcy-and-the-absolute-priority-rule.html

Ag in the Courtroom

            https://lawprofessors.typepad.com/agriculturallaw/2019/07/ag-in-the-courtroom.html

Key Farm Bankruptcy Modification on the Horizon?

https://lawprofessors.typepad.com/agriculturallaw/2019/07/key-farm-bankruptcy-modification-on-the-horizon.html

Ag Legal Issues in the Courts

https://lawprofessors.typepad.com/agriculturallaw/2019/08/ag-legal-issues-in-the-courts.html

Are Taxes Dischargeable in Bankruptcy?

https://lawprofessors.typepad.com/agriculturallaw/2019/09/are-taxes-dischargeable-in-bankruptcy.html

The “Almost Top Ten” Ag Law and Ag Tax Developments of 2019

https://lawprofessors.typepad.com/agriculturallaw/2019/12/the-almost-top-ten-ag-law-and-ag-tax-developments-of-2019.html 

BUSINESS PLANNING

Can a State Tax a Trust with No Contact with the State?

https://lawprofessors.typepad.com/agriculturallaw/2019/02/can-a-state-tax-a-trust-with-no-contact-with-the-state.html

Real Estate Professionals and Aggregation – The Passive Loss Rules

https://lawprofessors.typepad.com/agriculturallaw/2019/03/real-estate-professionals-and-aggregation-the-passive-loss-rules.html  

More Recent Developments in Agricultural Law

https://lawprofessors.typepad.com/agriculturallaw/2019/03/more-recent-developments-in-agricultural-law.html

Self-Rentals and the Passive Loss Rules

https://lawprofessors.typepad.com/agriculturallaw/2019/04/self-rentals-and-the-passive-loss-rules.html    

What’s the Best Entity Structure for the Farm or Ranch Business?

https://lawprofessors.typepad.com/agriculturallaw/2019/05/whats-the-best-entity-structure-for-the-farm-or-ranch-business.html

Where Does Life Insurance Fit in an Estate Plan for a Farmer or Rancher?

https://lawprofessors.typepad.com/agriculturallaw/2019/05/where-does-life-insurance-fit-in-an-estate-plan-for-a-farmer-or-rancher.html

Recent Developments in Farm and Ranch Business Planning

https://lawprofessors.typepad.com/agriculturallaw/2019/06/recent-developments-in-farm-and-ranch-business-planning.html

ESOPs and Ag Businesses – Part One

https://lawprofessors.typepad.com/agriculturallaw/2019/07/esops-and-ag-businesses-part-one.html

ESOPs and Ag Businesses – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2019/07/esops-and-ag-businesses-part-two.html

Is a Discount for The BIG Tax Available?

https://lawprofessors.typepad.com/agriculturallaw/2019/08/is-a-discount-for-the-big-tax-available.html

Tax Consequences of Forgiving Installment Payment Debt

https://lawprofessors.typepad.com/agriculturallaw/2019/09/tax-consequences-of-forgiving-installment-payment-debt.html

Ag Law and Tax in the Courts

https://lawprofessors.typepad.com/agriculturallaw/2019/09/ag-law-and-tax-in-the-courts.html

Shareholder Loans and S Corporation Stock Basis

https://lawprofessors.typepad.com/agriculturallaw/2019/09/shareholder-loans-and-s-corporation-stock-basis.html

The Family Limited Partnership – Part One

https://lawprofessors.typepad.com/agriculturallaw/2019/09/the-family-limited-partnership-part-one.html

The Family Limited Partnership – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2019/09/the-family-limited-partnership-part-two.html

Does the Sale of Farmland Trigger Net Investment Income Tax?

https://lawprofessors.typepad.com/agriculturallaw/2019/10/does-the-sale-of-farmland-trigger-net-investment-income-tax.html

Some Thoughts on Ag Estate/Business/Succession Planning

https://lawprofessors.typepad.com/agriculturallaw/2019/11/some-thoughts-on-ag-estatebusinesssuccession-planning.html

S Corporation Considerations

https://lawprofessors.typepad.com/agriculturallaw/2019/11/s-corporation-considerations.html

CIVIL LIABILITIES

When is an Employer Liable for the Conduct of Workers?

https://lawprofessors.typepad.com/agriculturallaw/2019/01/when-is-an-employer-liable-for-the-conduct-of-workers.html

Selected Recent Cases Involving Agricultural Law

https://lawprofessors.typepad.com/agriculturallaw/2019/01/selected-recent-cases-involving-agricultural-law.html

Ag Nuisances – Basic Principles

https://lawprofessors.typepad.com/agriculturallaw/2019/02/ag-nuisances-basic-principles.html

Do the Roundup Jury Verdicts Have Meaning For My Farming Operation?

https://lawprofessors.typepad.com/agriculturallaw/2019/04/do-the-roundup-jury-verdicts-have-meaning-for-my-farming-operation.html

What Does a “Reasonable Farmer” Know?

https://lawprofessors.typepad.com/agriculturallaw/2019/04/what-does-a-reasonable-farmer-know.html

Product Liability Down on the Farm - Modifications

https://lawprofessors.typepad.com/agriculturallaw/2019/05/product-liability-down-on-the-farm-modifications.html

Coming-To-The-Nuisance By Staying Put – Or, When 200 Equals 8,000

https://lawprofessors.typepad.com/agriculturallaw/2019/05/coming-to-the-nuisance-by-staying-put-or-when-200-equals-8000.html

More Ag Law and Tax Developments

https://lawprofessors.typepad.com/agriculturallaw/2019/05/more-ag-law-and-tax-developments.html

Public Trust vs. Private Rights – Where’s the Line?

https://lawprofessors.typepad.com/agriculturallaw/2019/06/public-trust-vs-private-rights-wheres-the-line.html

Ag Law in the Courts

            https://lawprofessors.typepad.com/agriculturallaw/2019/11/ag-law-in-the-courts.html

Fence Law Basics

            https://lawprofessors.typepad.com/agriculturallaw/2019/11/fence-law-basics.html

CONTRACTS

Negotiating Cell/Wireless Tower Agreements

https://lawprofessors.typepad.com/agriculturallaw/2019/01/negotiating-cellwireless-tower-agreements.html

Developments in Agricultural Law and Taxation

https://lawprofessors.typepad.com/agriculturallaw/2019/03/developments-in-agricultural-law-and-taxation.html

Ag Contracts – What if Goods Don’t Conform to the Contract?

https://lawprofessors.typepad.com/agriculturallaw/2019/09/ag-contracts-what-if-goods-dont-conform-to-the-contract.html

ENVIRONMENTAL LAW

Top 10 Developments in Ag Law and Tax for 2018 – Numbers 10 and 9

https://lawprofessors.typepad.com/agriculturallaw/2019/01/top-10-developments-in-ag-law-and-tax-for-2018-numbers-10-and-9.html

Top 10 Developments in Ag Law and Tax for 2018 – Numbers 8 and 7

https://lawprofessors.typepad.com/agriculturallaw/2019/01/top-10-developments-in-ag-law-and-tax-for-2018-numbers-8-and-7.html

Top Ten Agricultural Law and Tax Developments of 2018 – Numbers 6, 5, and 4

https://lawprofessors.typepad.com/agriculturallaw/2019/01/top-ten-agricultural-law-and-tax-developments-of-2018-numbers-6-5-and-4.html

Top Ten Agricultural Law and Tax Developments of 2018 – Numbers 3, 2, and 1

https://lawprofessors.typepad.com/agriculturallaw/2019/01/top-ten-agricultural-law-and-tax-developments-of-2018-numbers-3-2-and-1.html

Big EPA Developments – WOTUS and Advisory Committees

https://lawprofessors.typepad.com/agriculturallaw/2019/02/big-epa-developments-wotus-and-advisory-committees.html

Does Soil Erosion Pose a Constitutional Issue?

https://lawprofessors.typepad.com/agriculturallaw/2019/04/does-soil-erosion-pose-a-constitutional-issue.html

Public Trust vs. Private Rights – Where’s the Line?

https://lawprofessors.typepad.com/agriculturallaw/2019/06/public-trust-vs-private-rights-wheres-the-line.html

More Ag Law and Tax Developments

https://lawprofessors.typepad.com/agriculturallaw/2019/05/more-ag-law-and-tax-developments.html

Eminent Domain and Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2019/06/eminent-domain-and-agriculture.html

Court Decisions Illustrates USDA’s Swampbuster “Incompetence”

https://lawprofessors.typepad.com/agriculturallaw/2019/08/court-decision-illustrates-usdas-swampbuster-incompetence.html

Regulatory Changes to the Endangered Species Act

https://lawprofessors.typepad.com/agriculturallaw/2019/09/regulatory-changes-to-the-endangered-species-act.html

Irrigation Return Flows and the Clean Water Act

https://lawprofessors.typepad.com/agriculturallaw/2019/09/irrigation-return-flows-and-the-clean-water-act.html

Ag Law in the Courts

            https://lawprofessors.typepad.com/agriculturallaw/2019/10/ag-law-in-the-courts.html

Regulatory Takings – Pursuing a Remedy

https://lawprofessors.typepad.com/agriculturallaw/2019/10/regulatory-takings-pursuing-a-remedy.html

Does a Pollutant Discharge From Groundwater into a WOTUS Require a Federal Permit?

https://lawprofessors.typepad.com/agriculturallaw/2019/11/does-a-pollutant-discharge-from-groundwater-into-a-wotus-require-a-federal-permit.html

Groundwater Discharges of Pollutants and the Supreme Court

https://lawprofessors.typepad.com/agriculturallaw/2019/11/groundwater-discharges-of-pollutants-and-the-supreme-court.html

The “Almost Top Ten” Ag Law and Ag Tax Developments of 2019

https://lawprofessors.typepad.com/agriculturallaw/2019/12/the-almost-top-ten-ag-law-and-ag-tax-developments-of-2019.html

ESTATE PLANNING

Tax Filing Season Update and Summer Seminar!

https://lawprofessors.typepad.com/agriculturallaw/2019/01/tax-filing-season-update-and-summer-seminar.html

Time to Review Estate Planning Documents?

https://lawprofessors.typepad.com/agriculturallaw/2019/02/time-to-review-of-estate-planning-documents.html

Can a State Tax a Trust with No Contact with the State?

https://lawprofessors.typepad.com/agriculturallaw/2019/02/can-a-state-tax-a-trust-with-no-contact-with-the-state.html

Estate Planning in Second Marriage Situations

https://lawprofessors.typepad.com/agriculturallaw/2019/02/estate-planning-in-second-marriage-situations.html

Valuing Non-Cash Charitable Gifts

https://lawprofessors.typepad.com/agriculturallaw/2019/03/valuing-non-cash-charitable-gifts.html

Real Estate Professionals and Aggregation – The Passive Loss Rules

https://lawprofessors.typepad.com/agriculturallaw/2019/03/real-estate-professionals-and-aggregation-the-passive-loss-rules.html

Can the IRS Collect Unpaid Estate Tax From the Beneficiaries?

https://lawprofessors.typepad.com/agriculturallaw/2019/03/can-the-irs-collect-unpaid-estate-tax-from-the-beneficiaries.html

Sale of the Personal Residence After Death

https://lawprofessors.typepad.com/agriculturallaw/2019/03/sale-of-the-personal-residence-after-death.html

More Recent Developments in Agricultural Law

https://lawprofessors.typepad.com/agriculturallaw/2019/03/more-recent-developments-in-agricultural-law.html

Thrills with Wills – When is a Will “Unduly Influenced”?

https://lawprofessors.typepad.com/agriculturallaw/2019/04/thrills-with-wills-when-is-a-will-unduly-influenced.html

Heirs Liable for Unpaid Federal Estate Tax 28 Years After Death

https://lawprofessors.typepad.com/agriculturallaw/2019/05/heirs-liable-for-unpaid-federal-estate-tax-28-years-after-death.html

What’s the Best Entity Structure for the Farm or Ranch Business?

https://lawprofessors.typepad.com/agriculturallaw/2019/05/whats-the-best-entity-structure-for-the-farm-or-ranch-business.html

Where Does Life Insurance Fit in an Estate Plan for a Farmer or Rancher?

https://lawprofessors.typepad.com/agriculturallaw/2019/05/where-does-life-insurance-fit-in-an-estate-plan-for-a-farmer-or-rancher.html

Recent Developments in Farm and Ranch Business Planning

https://lawprofessors.typepad.com/agriculturallaw/2019/06/recent-developments-in-farm-and-ranch-business-planning.html

Wayfair Does Not Mean That a State Can Always Tax a Trust Beneficiary

https://lawprofessors.typepad.com/agriculturallaw/2019/06/wayfair-does-not-mean-that-a-state-can-always-tax-a-trust-beneficiary.html

ESOPs and Ag Businesses – Part One

https://lawprofessors.typepad.com/agriculturallaw/2019/07/esops-and-ag-businesses-part-one.html

Issues in Estate Planning – Agents, Promises, and Trustees

https://lawprofessors.typepad.com/agriculturallaw/2019/10/issues-in-estate-planning-agents-promises-and-trustees.html

The Importance of Income Tax Basis “Step-Up” at Death

https://lawprofessors.typepad.com/agriculturallaw/2019/10/the-importance-of-income-tax-basis-step-up-at-death.html

Ag Law in the Courts

            https://lawprofessors.typepad.com/agriculturallaw/2019/11/ag-law-in-the-courts.html

Co-Tenancy or Joint Tenancy – Does it Really Matter?

https://lawprofessors.typepad.com/agriculturallaw/2019/11/co-tenancy-or-joint-tenancy-does-it-really-matter.html

Year-End Legislation Contains Tax Extenders, Repealers, and Modifications to Retirement Provisions

https://lawprofessors.typepad.com/agriculturallaw/2019/12/year-end-legislation-contains-tax-extenders-repealers-and-modification-to-retirement-provisions.html

INCOME TAX

Top 10 Developments in Ag Law and Tax for 2018 – Numbers 10 and 9

https://lawprofessors.typepad.com/agriculturallaw/2019/01/top-10-developments-in-ag-law-and-tax-for-2018-numbers-10-and-9.html

Top Ten Agricultural Law and Tax Developments of 2018 – Numbers 6, 5, and 4

https://lawprofessors.typepad.com/agriculturallaw/2019/01/top-ten-agricultural-law-and-tax-developments-of-2018-numbers-6-5-and-4.html

Top Ten Agricultural Law and Tax Developments of 2018 – Numbers 3, 2, and 1

https://lawprofessors.typepad.com/agriculturallaw/2019/01/top-ten-agricultural-law-and-tax-developments-of-2018-numbers-3-2-and-1.html

Tax Filing Season Update and Summer Seminar!

https://lawprofessors.typepad.com/agriculturallaw/2019/01/tax-filing-season-update-and-summer-seminar.html

QBID Final Regulations on Aggregation and Rents – The Meaning for Farm and Ranch Businesses

https://lawprofessors.typepad.com/agriculturallaw/2019/01/qbid-final-regulations-on-aggregation-and-rents-the-meaning-for-farm-and-ranch-businesses.html

The QBID Final Regulations – The “Rest of the Story”

https://lawprofessors.typepad.com/agriculturallaw/2019/01/the-qbid-final-regulations-the-rest-of-the-story.html

Can a State Tax a Trust with No Contact with the State?

https://lawprofessors.typepad.com/agriculturallaw/2019/02/can-a-state-tax-a-trust-with-no-contact-with-the-state.html

Tax Matters – Where Are We Now?

https://lawprofessors.typepad.com/agriculturallaw/2019/02/tax-matters-where-are-we-now.html

New Developments on Exclusion of Employer-Provided Meals

https://lawprofessors.typepad.com/agriculturallaw/2019/02/new-development-on-exclusion-of-employer-provided-meals.html

Valuing Non-Cash Charitable Gifts

https://lawprofessors.typepad.com/agriculturallaw/2019/03/valuing-non-cash-charitable-gifts.html

Passive Losses and Material Participation

https://lawprofessors.typepad.com/agriculturallaw/2019/03/passive-losses-and-material-participation.html

Passive Losses and Real Estate Professionals

https://lawprofessors.typepad.com/agriculturallaw/2019/03/passive-losses-and-real-estate-professionals.html

Developments in Agricultural Law and Taxation

https://lawprofessors.typepad.com/agriculturallaw/2019/03/developments-in-agricultural-law-and-taxation.html

Real Estate Professionals and Aggregation – The Passive Loss Rules

https://lawprofessors.typepad.com/agriculturallaw/2019/03/real-estate-professionals-and-aggregation-the-passive-loss-rules.html

Sale of the Personal Residence After Death

https://lawprofessors.typepad.com/agriculturallaw/2019/03/sale-of-the-personal-residence-after-death.html

Cost Segregation Study – Do You Need One for Your Farm?

https://lawprofessors.typepad.com/agriculturallaw/2019/03/cost-segregation-study-do-you-need-one-for-your-farm.html

Cost Segregation – Risk and Benefits

https://lawprofessors.typepad.com/agriculturallaw/2019/04/cost-segregation-risks-and-benefits.html

Permanent Conservation Easement Donation Transactions Find Their Way to the IRS “Dirty Dozen” List

https://lawprofessors.typepad.com/agriculturallaw/2019/04/permanent-conservation-easement-donation-transactions-find-their-way-to-the-irs-dirty-dozen-list.html

Self-Rentals and the Passive Loss Rules

https://lawprofessors.typepad.com/agriculturallaw/2019/04/self-rentals-and-the-passive-loss-rules.html

More on Self-Rentals

            https://lawprofessors.typepad.com/agriculturallaw/2019/04/more-on-self-rentals.html

Of Black-Holes, Tax Refunds, and Statutory Construction

https://lawprofessors.typepad.com/agriculturallaw/2019/04/of-black-holes-tax-refunds-and-statutory-construction.html

What Happened in Tax During Tax Season?

https://lawprofessors.typepad.com/agriculturallaw/2019/04/what-happened-in-tax-during-tax-season.html

Cost Segregation and the Recapture Issue

https://lawprofessors.typepad.com/agriculturallaw/2019/06/cost-segregation-and-the-recapture-issue.html

S.E. Tax and Contract Production Income

https://lawprofessors.typepad.com/agriculturallaw/2019/06/se-tax-and-contract-production-income.html

Recent Developments in Farm and Ranch Business Planning

https://lawprofessors.typepad.com/agriculturallaw/2019/06/recent-developments-in-farm-and-ranch-business-planning.html

Ag Cooperatives and the QBID – Initial Guidance

https://lawprofessors.typepad.com/agriculturallaw/2019/06/ag-cooperatives-and-the-qbid-initial-guidance.html

Wayfair Does Not Mean That a State Can Always Tax a Trust Beneficiary

https://lawprofessors.typepad.com/agriculturallaw/2019/06/wayfair-does-not-mean-that-a-state-can-always-tax-a-trust-beneficiary.html

Start Me Up! – Tax Treatment of Start-Up Expenses

https://lawprofessors.typepad.com/agriculturallaw/2019/07/start-me-up-tax-treatment-of-start-up-expenses.html

More on Real Estate Exchanges

https://lawprofessors.typepad.com/agriculturallaw/2019/07/more-on-real-estate-exchanges.html

2019 Tax Planning for Midwest/Great Plains Farmers and Ranchers

https://lawprofessors.typepad.com/agriculturallaw/2019/07/2019-tax-planning-for-midwestgreat-plains-farmers-and-ranchers.html

Tax Treatment of Settlements and Court Judgments

https://lawprofessors.typepad.com/agriculturallaw/2019/07/tax-treatment-of-settlements-and-court-judgments.html

ESOPs and Ag Businesses – Part One

https://lawprofessors.typepad.com/agriculturallaw/2019/07/esops-and-ag-businesses-part-one.html 

Tax “Math” on Jury Verdicts

https://lawprofessors.typepad.com/agriculturallaw/2019/07/tax-math-on-jury-verdicts.html

Kansas Revenue Department Takes Aggressive Position Against Remote Sellers

https://lawprofessors.typepad.com/agriculturallaw/2019/08/kansas-revenue-department-take-aggressive-position-against-remote-sellers.html

Tax-Deferred Exchanges and Conservation Easements

https://lawprofessors.typepad.com/agriculturallaw/2019/08/tax-deferred-exchanges-and-conservation-easements.html

Proper Handling of Breeding Fees

https://lawprofessors.typepad.com/agriculturallaw/2019/08/proper-handling-of-breeding-fees.html

Proper Tax Reporting of Commodity Wages

https://lawprofessors.typepad.com/agriculturallaw/2019/08/proper-tax-reporting-of-commodity-wages.html

Tax Consequences of Forgiving Installment Payment Debt

https://lawprofessors.typepad.com/agriculturallaw/2019/09/tax-consequences-of-forgiving-installment-payment-debt.html

Are Taxes Dischargeable in Bankruptcy?

https://lawprofessors.typepad.com/agriculturallaw/2019/09/are-taxes-dischargeable-in-bankruptcy.html

Ag Law and Tax in the Courts

https://lawprofessors.typepad.com/agriculturallaw/2019/09/ag-law-and-tax-in-the-courts.html

Refund Claim Relief Due to Financial Disability

https://lawprofessors.typepad.com/agriculturallaw/2019/09/refund-claim-relief-due-to-financial-disability.html

Shareholder Loans and S Corporation Stock Basis

https://lawprofessors.typepad.com/agriculturallaw/2019/09/shareholder-loans-and-s-corporation-stock-basis.html

The Family Limited Partnership – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2019/09/the-family-limited-partnership-part-two.html

Hobby Losses Post-2017 and Pre-2026 – The Importance of Establishing a Profit Motive

https://lawprofessors.typepad.com/agriculturallaw/2019/10/hobby-losses-post-2017-and-pre-2026-the-importance-of-establishing-a-profit-motive.html

The Importance of Income Tax Basis “Step-Up” at Death

https://lawprofessors.typepad.com/agriculturallaw/2019/10/the-importance-of-income-tax-basis-step-up-at-death.html

Bad Debt Deduction

            https://lawprofessors.typepad.com/agriculturallaw/2019/10/bad-debt-deduction.html

More on Cost Depletion – Bonus Payments

https://lawprofessors.typepad.com/agriculturallaw/2019/10/more-on-cost-depletion-bonus-payments.html

Recapture – A Dirty Word in the Tax Code Lingo

https://lawprofessors.typepad.com/agriculturallaw/2019/10/recapture-a-dirty-word-in-tax-code-lingo.html

Does the Sale of Farmland Trigger Net Investment Income Tax?

https://lawprofessors.typepad.com/agriculturallaw/2019/10/does-the-sale-of-farmland-trigger-net-investment-income-tax.html

Are Director Fees Subject to Self-Employment Tax?

https://lawprofessors.typepad.com/agriculturallaw/2019/10/are-director-fees-subject-to-self-employment-tax.html

Are Windbreaks Depreciable?

https://lawprofessors.typepad.com/agriculturallaw/2019/11/are-windbreaks-depreciable.html

Tax Issues Associated with Restructuring Credit Lines

https://lawprofessors.typepad.com/agriculturallaw/2019/12/tax-issues-associated-with-restructuring-credit-lines.html

Is a Tenancy-in-Common Interest Eligible for Like-Kind Exchange Treatment?

https://lawprofessors.typepad.com/agriculturallaw/2019/12/is-a-tenancy-in-common-interest-eligible-for-like-kind-exchange-treatment.html

Year-End Legislation Contains Tax Extenders, Repealers, and Modifications to Retirement Provisions

https://lawprofessors.typepad.com/agriculturallaw/2019/12/year-end-legislation-contains-tax-extenders-repealers-and-modification-to-retirement-provisions.html

The “Almost Top Ten” Ag Law and Ag Tax Developments of 2019

https://lawprofessors.typepad.com/agriculturallaw/2019/12/the-almost-top-ten-ag-law-and-ag-tax-developments-of-2019.html

INSURANCE

Prevented Planting Payments – Potential Legal Issues?

https://lawprofessors.typepad.com/agriculturallaw/2019/06/prevented-planting-payments-potential-legal-issues.html

Ag Law in the Courts

            https://lawprofessors.typepad.com/agriculturallaw/2019/11/ag-law-in-the-courts.html

REAL PROPERTY

 Negotiating Cell/Wireless Tower Agreements

https://lawprofessors.typepad.com/agriculturallaw/2019/01/negotiating-cellwireless-tower-agreements.html

Selected Recent Cases Involving Agricultural Law

https://lawprofessors.typepad.com/agriculturallaw/2019/01/selected-recent-cases-involving-agricultural-law.html

The Accommodation Doctrine – More Court Action

https://lawprofessors.typepad.com/agriculturallaw/2019/01/the-accommodation-doctrine-more-court-action.html

Defects in Real Estate Deeds – Will Time Cure All?

https://lawprofessors.typepad.com/agriculturallaw/2019/02/defects-in-real-estate-deeds-will-time-cure-all.html

Is there a Common-Law Right to Hunt (and Fish) Your Own Land?

https://lawprofessors.typepad.com/agriculturallaw/2019/02/is-there-a-common-law-right-to-hunt-and-fish-your-own-land.html

Legal Issues Associated with Abandoned Railways

https://lawprofessors.typepad.com/agriculturallaw/2019/05/legal-issues-associated-with-abandoned-railways.html

Public Trust vs. Private Rights – Where’s the Line?

https://lawprofessors.typepad.com/agriculturallaw/2019/06/public-trust-vs-private-rights-wheres-the-line.html

Ag in the Courtroom

            https://lawprofessors.typepad.com/agriculturallaw/2019/07/ag-in-the-courtroom.html

More on Real Estate Exchanges

https://lawprofessors.typepad.com/agriculturallaw/2019/07/more-on-real-estate-exchanges.html

How Does the Rule Against Perpetuities Apply in the Oil and Gas Context?

https://lawprofessors.typepad.com/agriculturallaw/2019/08/how-does-the-rule-against-perpetuities-apply-in-the-oil-and-gas-context.html

Ag Law in the Courts

            https://lawprofessors.typepad.com/agriculturallaw/2019/10/ag-law-in-the-courts.html

Cost Depletion of Minerals

https://lawprofessors.typepad.com/agriculturallaw/2019/10/cost-depletion-of-minerals.html

Co-Tenancy or Joint Tenancy – Does it Really Matter?

https://lawprofessors.typepad.com/agriculturallaw/2019/11/co-tenancy-or-joint-tenancy-does-it-really-matter.html

“Slip Slidin’ Away” – The Right of Lateral and Subjacent Support

https://lawprofessors.typepad.com/agriculturallaw/2019/12/slip-slidin-away-the-right-of-lateral-and-subjacent-support.html

Is a Tenancy-in-Common Interest Eligible for Like-Kind Exchange Treatment?

https://lawprofessors.typepad.com/agriculturallaw/2019/12/is-a-tenancy-in-common-interest-eligible-for-like-kind-exchange-treatment.html

REGULATORY LAW

Top 10 Developments in Ag Law and Tax for 2018 – Numbers 10 and 9

https://lawprofessors.typepad.com/agriculturallaw/2019/01/top-10-developments-in-ag-law-and-tax-for-2018-numbers-10-and-9.html

Top Ten Agricultural Law and Tax Developments of 2018 – Numbers 6, 5, and 4

https://lawprofessors.typepad.com/agriculturallaw/2019/01/top-ten-agricultural-law-and-tax-developments-of-2018-numbers-6-5-and-4.html

Top Ten Agricultural Law and Tax Developments of 2018 – Numbers 3, 2, and 1

https://lawprofessors.typepad.com/agriculturallaw/2019/01/top-ten-agricultural-law-and-tax-developments-of-2018-numbers-3-2-and-1.html

Is There a Common-Law Right to Hunt (and Fish) Your Own Land?

https://lawprofessors.typepad.com/agriculturallaw/2019/02/is-there-a-common-law-right-to-hunt-and-fish-your-own-land.html

Packers and Stockyards Act – Basic Provisions

https://lawprofessors.typepad.com/agriculturallaw/2019/03/packers-and-stockyards-act-basic-provisions.html

Packers and Stockyards Act Provisions for Unpaid Cash Sellers of Livestock

https://lawprofessors.typepad.com/agriculturallaw/2019/03/packers-and-stockyards-act-provisions-for-unpaid-cash-sellers-of-livestock.html

More Recent Developments in Agricultural Law

https://lawprofessors.typepad.com/agriculturallaw/2019/03/more-recent-developments-in-agricultural-law.html

Ag Antitrust – Is There a Crack in the Wall of the “Mighty-Mighty” (Illinois) Brick House?

https://lawprofessors.typepad.com/agriculturallaw/2019/05/ag-antitrust-is-there-a-crack-in-the-wall-of-the-mighty-mighty-illinois-brick-house.html

Can Foreign Persons/Entities Own U.S. Agricultural Land?

https://lawprofessors.typepad.com/agriculturallaw/2019/05/can-foreign-personsentities-own-us-agricultural-land.html

Prevented Planting Payments – Potential Legal Issues?

https://lawprofessors.typepad.com/agriculturallaw/2019/06/prevented-planting-payments-potential-legal-issues.html

Eminent Domain and Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2019/06/eminent-domain-and-agriculture.html

Classification of Seasonal Ag Workers – Why It Matters

https://lawprofessors.typepad.com/agriculturallaw/2019/06/classification-of-seasonal-ag-workers-why-it-matters.html

Administrative Agency Deference – Little Help for Ag From the Supreme Court

https://lawprofessors.typepad.com/agriculturallaw/2019/06/administrative-agency-deference-little-help-for-ag-from-the-supreme-court.html

Regulation of Food Products

https://lawprofessors.typepad.com/agriculturallaw/2019/07/regulation-of-food-products.html

Ag Legal Issues in the Courts

https://lawprofessors.typepad.com/agriculturallaw/2019/08/ag-legal-issues-in-the-courts.html

Kansas Revenue Department Takes Aggressive Position Against Remote Sellers

https://lawprofessors.typepad.com/agriculturallaw/2019/08/kansas-revenue-department-take-aggressive-position-against-remote-sellers.html

Court Decision Illustrates USDA’s Swampbuster “Incompetence”

https://lawprofessors.typepad.com/agriculturallaw/2019/08/court-decision-illustrates-usdas-swampbuster-incompetence.html

Ag Law and Tax in the Courts

https://lawprofessors.typepad.com/agriculturallaw/2019/09/ag-law-and-tax-in-the-courts.html

Regulatory Takings – Pursuing a Remedy

https://lawprofessors.typepad.com/agriculturallaw/2019/10/regulatory-takings-pursuing-a-remedy.html

The “Almost Top Ten” Ag Law and Ag Tax Developments of 2019

https://lawprofessors.typepad.com/agriculturallaw/2019/12/the-almost-top-ten-ag-law-and-ag-tax-developments-of-2019.html

SECURED TRANSACTIONS

Market Facilitation Program Pledged as Collateral – What are the Rights of a Lender?

https://lawprofessors.typepad.com/agriculturallaw/2019/05/market-facilitation-program-payments-pledged-as-collateral-what-are-the-rights-of-a-lender.html

SEMINARS AND CONFERENCES

Summer 2019 Farm and Ranch Tax and Estate/Business Planning Seminar

https://lawprofessors.typepad.com/agriculturallaw/2019/04/summer-2019-farm-and-ranch-tax-and-estatebusiness-planning-seminar.html

2019 National Ag Tax/Estate and Business Planning Conference in Steamboat Springs!

https://lawprofessors.typepad.com/agriculturallaw/2019/05/2019-national-ag-taxestate-and-business-planning-conference-in-steamboat-springs.html

Summer Tax and Estate Planning Seminar!

https://lawprofessors.typepad.com/agriculturallaw/2019/07/summer-tax-and-estate-planning-seminar.html

2020 National Summer Ag Income Tax/Estate and Business Planning Seminar

https://lawprofessors.typepad.com/agriculturallaw/2019/12/2020-national-summer-ag-income-taxestate-and-business-planning-seminar.html

Fall Seminars

            https://lawprofessors.typepad.com/agriculturallaw/2019/08/fall-seminars.html

WATER LAW

The Accommodation Doctrine – More Court Action

https://lawprofessors.typepad.com/agriculturallaw/2019/01/the-accommodation-doctrine-more-court-action.html

Ag Legal Issues in the Courts

https://lawprofessors.typepad.com/agriculturallaw/2019/08/ag-legal-issues-in-the-courts.html

Ag Law in the Courts

            https://lawprofessors.typepad.com/agriculturallaw/2019/10/ag-law-in-the-courts.html

Regulating Existing Water Rights – How Far Can State Government Go?

https://lawprofessors.typepad.com/agriculturallaw/2019/10/regulating-existing-water-rights-how-far-can-state-government-go.html

The Politics of Prior Appropriation – Is a Senior Right Really Senior?

https://lawprofessors.typepad.com/agriculturallaw/2019/12/the-politics-of-prior-appropriation-is-a-senior-right-really-senior.html

Changing Water Right Usage

https://lawprofessors.typepad.com/agriculturallaw/2019/12/changing-water-right-usage.html

February 28, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Thursday, February 18, 2021

Will the Estate Tax Valuation Regulations Return?

Overview

Over the past few decades, valuation discounting through the use of family-owned business entities has become a popular estate and gift tax planning technique. If structured properly, the courts have routinely validated discounts ranging from 10 to 40 percent. Valuation discounting has proven to be a very effective strategy for transferring wealth to subsequent generations. It is a particularly useful technique with respect to the transfer of small family businesses and farming/ranching operations. Similar, but lower, valuation discounts can also be achieved with respect to the transfer of fractional interests in real estate.

With the new Administration and Congress in place, will estate tax valuation regulations be put in place that diminish or eliminate the valuation discounting technique?  It’s a distinct possibility.  If it happens, it will remove a significant planning tool for higher wealth estates and will increase the transfer tax cost of transitioning certain farms and ranches to the next generation.

Estate tax valuation discounts – it’s the topic of today’s post.

Valuation and The Concept of Discounting

The value of an asset for federal estate and gift tax purposes is “fair market value.”  For assets traded on an established market or that have a readily ascertainable value, the value for gift and estate tax purposes is their fair market value on the date of the transfer or death as determined by the established market or the otherwise readily ascertainable value.  For other assets, such as interests in a closely-held (non-publicly trade) farm or ranch.  Fair market value is more difficult to determine.  For this type of property, fair market value is defined as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell, and both having reasonable knowledge of relevant facts.” Treas. Reg. §§20.2031-1(b); 25.2512-1; Rev. Rul. 59-60, 1959-1 C.B. 237.  State law controls the determination of what has been transferred in the valuation process. 

The concept of “fair market value” under the “willing buyer-willing seller” test must necessarily take into account a value reduction to reflect either non-marketability of an interest in a closely-held business as well as any lack of control (minority position) that the interest has. A willing buyer simply would not pay a pro-rata portion of an entity’s value for an interest that is not a controlling interest or is not marketable because it is not publicly traded.  Under this standard, it is immaterial whether the buyer and seller are related – the test is based on a hypothetical buyer and seller. Thus, there is no attribution of ownership between family members that would change a minority interest into a majority interest.

Proposed Regulations

Background.  The two primary tax Code provisions that bear on the valuation issue are I.R.C. §2036 and I.R.C. §2704.  I.R.C. §2036 states that, “[t]he value of the gross estate shall include the value of all property to the extent of any interest therein of which the decedent has at any time made a transfer (except in case of a bona fide sale for an adequate and full consideration in money or money’s worth), by trust or otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death— (1) the possession or enjoyment of, or the right to the income from, the property, or (2) the right, either alone or in conjunction with any person, to designate the persons who shall possess or enjoy the property or the income therefrom.”  I.R.C. §2704 address how to value intra-family transfers of interests in corporations and partnerships subject to lapsing voting or liquidation rights and restrictions on liquidation.  I.R.C. §2704(a)(1) generally provides that, if there is a lapse of any voting or liquidation right in a corporation or a partnership and the individual holding the right immediately before the lapse and members of the individual’s family hold, both before and after the lapse, control of the entity, the lapse will be treated as a transfer by the individual by gift, or a transfer which is includible in the gross estate, whichever is applicable.  Combined, these two Code sections govern transfers of property where the transferor retains certain rights over the property where a bona fide sale for adequate consideration wasn’t received, and the intra-family transfers.  Both of those types of transactions are often a part of estate and business planning for farming and ranching operations.

2016 proposal.  Near the tail-end of the Obama/Biden administration, the Treasury issued proposed regulations (REG-163113-02) that would have significantly curtailed the ability to take valuation discounts on intrafamily transfers of business interests (e.g., discounts for lack of marketability and minority interests) involving both I.R.C. §2036 and I.R.C. §2704.  Specifically, the proposed regulations would treat certain transfers occurring within three years of death that result in the lapse of a liquidation right as transfers occurring at death for purposes of I.R.C. §2704(a). At that time, the IRS explained that the regulations were intended to address estate planning strategies that avoid the application of I.R.C. §2704. The proposed regulations added a three-year rule to narrow the exception to the definition of a lapse of a liquidation right to transfers that occur three or more years prior to the transferor’s death and that do not restrict or eliminate the rights associated with the ownership of the transferred interest.  The proposed regulation was issued by itself, and not also as a temporary regulation, and did not have any provision stating that a taxpayer could rely on it before it is issued as a final regulation.

The effective date of the proposed regulation reaches back to include valuations associated with any lapse of any right created on or after October 8, 1990 occurring on or after the date the proposed regulations is published in the Federal Register as a final regulation. This would make it nearly impossible to avoid the application of the final regulation by various estate planning techniques.

IRS concern.  So, why proposed regulations?  What is the IRS concerned about?  While the IRS has won a number of court cases involving discounting in the context of family limited partnerships (FLPs), it has lost some very significant ones.  The courts have validated discounts associated with FLPs where the FLP was formed for legitimate business purposes and state law formalities have been followed closely.   From my sources both inside and outside of the IRS, the IRS is apparently still encountering situations involving FLPs that are not established in accordance with state law, don’t adequately document the business reasons for forming the FLP and have inaccurate or incomplete asset appraisals.  They think that the revenue loss is large as a result of the technical non-compliance with I.R.C. §§2036 and 2704.   Consequently, the new proposed regulations eliminate the ability to value an interest in an entity (in the aggregate) at an amount less than the value of the value of the property had it not been contributed to the entity.  The IRS view is that the lower value of the property as contained in the entity is an inappropriate way to avoid transfer taxes. 

Elimination of the proposed regulations.  Before the proposed regulations were finalized, President Trump issued Executive Order (EO) 13789.  In that EO, President Trump directed the Treasury Department to review all significant tax regulations issued since January 1, 2016. The Treasury Department was directed to identify regulations that may be “unduly burdensome or complex,” and propose actions to mitigate those burdens.  The Treasury Department identified the proposed valuation regulations as unduly burdensome or complex, and “would have hurt family-owned and operated businesses by limiting valuation discounts.” Additionally, the regulations “would have made it difficult and costly for a family to transfer their businesses to the next generation.” The Treasury Department also noted stakeholders’ concerns that the regulations were vague and would be burdensome to administer.

In withdrawing the proposed regulations, (NPRM REG-163113-02), the Treasury commented that the regulations were “unworkable” and stated that, “it is unclear whether the valuation rules of the proposed regulations would have even succeeded in curtailing artificial valuation discounts.”

Resurrection?

The Biden Treasury Department could revive the withdrawn proposed regulations and potentially finalize them sometime in 2021.  If that happens, the ability to generate valuation discounts for the transfer of family-owned entities such as farm and ranches would be seriously impacted. 

Clearly, the Treasury can write regulations that specify that certain restrictions on transfer can be disregarded when determining the value of an interest in an entity to a family member of the transferor.  However, without legislation allowing it, the IRS cannot simply ignore discounts for lack of marketability or lack of control (minority interest).  Long-standing interpretations of I.R.C. §2704 (and I.R.C. §2036) by the Tax Court and the Circuit Courts support valuation discounts when the transaction is done properly.  As a result, the Courts may have a different view than the IRS/Treasury with respect to the proposed regulations based on the longstanding Congressional intent to allow discounts in a family context. Having discretion does not mean that Treasury has discretion to determine value as it pleases.

Conclusion

The possibility of the valuation regulations returning puts an emphasis on examining estate and transition plans now.  It’s a good idea to have a wealth transfer strategy in place.  While the political margins are close in the House and Senate, the Treasury and IRS could significantly alter the planning landscape without any need for congressional approval. 

The valuation discounting issue merits close attention.

February 18, 2021 in Business Planning, Estate Planning | Permalink | Comments (0)

Monday, February 8, 2021

C Corporate Tax Planning; Management Fees and Reasonable Compensation - A Roadmap of What Not to Do

Overview

A recent U.S. Tax Court decision is instructive on how carelessness in tax planning with respect to a C corporation can prove to be costly.  Maintaining detailed books and records; properly invoicing for services rendered to the corporation; carefully planning for and specifying how management fees are to be set and compensated; and paying reasonable compensation are all key components to how a C corporation should be operated.  But, when those aspects of C corporate operational life are not observed, a bad tax outcome is the result.  A recent U.S. Tax Court opinion makes that point clear.

Key aspects of operating a C corporation and the perils of sloppiness – it’s the focus of today’s post.

Corporate Deductions

Treas. Reg. §1.162-7(a) allows a deduction for ordinary and necessary business expenses that are paid or incurred in carrying on a trade or business. See also I.R.C. §162(a)(1).  This includes a reasonable allowance for salaries or other compensation for personal services that are actually rendered to the corporation. Treas. Reg. §1.162-7(a).  That’s a key point in the C (and S) corporation context – compensation must be “reasonable” to be deductible.  Management fees must meet also meet the ordinary and necessary test.  They are part of overall compensation and, overall, compensation must be reasonable – an amount that would typically be paid for similar services by similar businesses under similar circumstances.  The reasonableness test is applied on an individual-by-individual basis rather than whether, for instance, the total compensation to a group of shareholders is reasonable.  In addition, payment must be for actual services.  It must not be a distribution to the shareholders that is disguised as deductible compensation. 

Deducting management fees.  The issue of whether compensation is deductible as payment for services rendered to the corporation is a particular sticky one when the corporation doesn’t have very many shareholders.  In that instance, the courts tend to view the situation lending itself to a greater probability that there is a lack of bargaining at arms’ length between the employees (e.g., shareholders) and the corporate board.  The tendency, at least in the view of the IRS is that “management fees” are not really paid purely for services rendered to the corporation. But, the analysis is based on a facts and circumstances test containing multiple factors – the corporation’s history of distributions to the holders of the corporate equity; whether the management fee paid to a shareholder is proportional to that shareholder’s percentage interest in the corporation; whether the services performed were via the shareholder’s controlled entity and the fee was paid to the shareholder; whether the management fee was negotiated at the beginning of the tax year and paid throughout the year as services were performed; the level of corporate taxable income after deducting management fees that were paid out; whether there was a structure in place for determining the level of management fees.

Recent Tax Court Case

In Aspro, Inc. v. Comr., T.C. Memo. 2021-8, the petitioner was a C corporation in the asphalt paving business incorporated under Iowa law with its principal place of business in Iowa.  The petitioner had three shareholders and did not declare or distribute any dividends to them during the tax years in issue (2012-2014) or in any prior year.  This was despite the petitioner having significant profits before setting management fees.  Thus, the shareholders didn’t receive any return on their equity investment.  The petitioner did not enter into any written management or consulting services agreements with any of its shareholders. Also, there was no management fee rate or billing structure negotiated or agreed to between the shareholders and the petitioner at the beginning of any of the years in issue. 

None of the shareholders invoiced or billed the petitioner for any services provided indirectly via other legal entities that the shareholders controlled. Instead, the petitioner’s Board of Directors would approve the management fees to be paid to the shareholders at a board meeting later in the tax year, when the Board had a better idea how the company was going to perform and how much earnings the company should retain.  However, the Board minutes did not reflect how the determinations were made.  The Board did not attempt to value or quantify any of the services performed on its behalf and simply approved a lump-sum management fee for each shareholder for each year. The amounts were not determined after considering the services performed and their values. There was no correlation between management fees paid and services rendered. In total, the shareholders received management fees exceeding $1 million every year for the years in issue. The management fees were simply paid after-the-fact in an attempt to zero-out the petitioner’s taxable income.

The IRS completely denied the petitioner’s claimed deductions for management fees (and amounts the petitioner claimed for the domestic production activities deduction) for the years in issue.  The Tax Court upheld the IRS position denying the deductions. 

The Tax Court determined that the petitioner failed to prove that the management fees were ordinary and necessary business expenses and reasonable in accordance with Treas. Reg. §1.162-7.  Based on the facts and circumstances, the Tax Court concluded that the absence of the dividend payments where the petitioner had available profits created an inference that at least some of the compensation represented a distribution with respect to corporate stock.  While the management fees loosely corresponded to each shareholder’s percentage interest, the Tax Court inferred that the shareholders were receiving disguised distributions based on each shareholder’s equity interest. 

As for the services rendered to the corporation via the shareholders’ controlled entities, the Tax Court noted that if the services were to be compensated, the petitioner should have invoiced directly for the services.  The services, as a result, did not provide even indirect support for the management fees the petitioner paid to its shareholders. 

The Tax Court also noted that the management fees were not established in advance for services to be provided and there was no management agreement that evidenced any type of arms’ length negotiation to support a fee structure that the parties bargained for.  The shareholders also could not explain how the management fees were determined, and the corporate President (and one of petitioner’s Board members) displayed a misunderstanding of the nature of deductible management fees and stock distributions. 

The Tax Court also pointed out that the effect of the deduction for management fees was to create little taxable income to the petitioner.  That, the Tax Court believed, indicated that the fees were disguised distributions.  The Tax Court further determined that the petitioner’s President rendered no services to the petitioner other than being the president and, as such was already overcompensated by his base salary and bonus totaling approximately $500,000 annually.  Thus, the additional management fee was completely unreasonable as to him. 

Reasonable Compensation

As noted above, to be deductible, compensation in the corporate context must be “reasonable.”  For starters, that means that the corporation must establish the connection between the services that are performed and the compensation (including management fees) that are paid.  In AsPro, Inc., the corporation didn’t meet that burden.  In Aspro, Inc., the Tax Court looked at numerous factors to determine reasonableness – the employee’s qualifications; the work performed for the corporation; the size of the corporation and the complexity of business operations; how salaries compare to corporate gross and net income; general economic conditions in the corporation’s industry; how compensation to the shareholders stacked-up against corporate distributions to those same shareholders; whether the compensation packages for the shareholders was comparable positions in similar businesses; overall salary policy; and past compensation history. 

The Tax Court also noted that some of the U.S. Circuit Courts of Appeal don’t analyze the issue of reasonable compensation based on multiple factors, but rather the amount of compensation an independent investor would pay.  The Circuit Court to which Aspro Inc. would be appealable has not settled on the approach it would use to determine reasonable compensation in the corporate context.

Conclusion

The Aspro, Inc. case is a textbook roadmap case of how to screw up C corporate tax planning.  There was no detailed, thought-out plan backing up the management fees, no clarity or documentation of what services were rendered and how frequently they were rendered, and no substantiation of whether the services were necessary to be paid for in the petitioner’s industry.  There was no management agreement that listed the services to be provided by each contracting party, and no documentation of the level of pay for those services. 

The complete lack of planning and associated documentation in Aspro, Inc. resulted in a tax bill exceeding $1.5 million, plus interest.

Truly a roadmap for disaster.

February 8, 2021 in Business Planning, Income Tax | Permalink | Comments (0)

Sunday, January 24, 2021

Recent Happenings in Ag Law and Ag Tax

Overview

The world of agricultural law and taxation is certainly pertinent in the daily lives of farmers and ranchers.  In recent days and weeks, the courts have addressed more issues that can make a difference for ag producers.  In today’s post, I examine a few of those.  Those discussed today involve individual and entity taxation as well as environmental and regulatory issues.

More recent developments in ag law and tax - it’s the topic of today’s post.

Flow-Through Entities Can Deduct State and Local Taxes

IRS Notice 2020-75, applicable to specified income tax payments made on or after November 9, 2020

In a Notice, the IRS has said that taxes that are imposed on and paid by a partnership (or an S corporation) on its income are allowed as a deduction by the partnership (or S corporation) in computing its non-separately stated taxable income or loss for the tax year of payment. They are not passed through to the partners or shareholders, where they would be subject to the $10,000 limitation on state and local tax deductions imposed by the Tax Cuts and Jobs Act effective for tax years beginning after 2017.

The IRS did not set a timetable for the issuance of proposed regulations. The IRS issued the Notice in response to some states enacting laws to allow this type of treatment for partnerships and S corporations. Thus, for a flow-through entity to be able to do this for a partnership or S corporation, state law must provide for pass-through entity level taxation. The Notice won't apply unless state law allows this. Merely allowing a pass-through entity to make withholding tax payments on behalf of the owners will not qualify because those withholding tax payments are treated as payments made by the owners and not as payments in satisfaction of the pass -through entity's tax liability. In addition, entities taking advantage of the Notice will reduce allocable taxable income which will, in turn reduce allocable qualified business income for purposes of I.R.C. §199A and, therefore, the qualified business income deduction. 

IRA Distributions Included in Income and Subject to Early Withdrawal Penalty 

Ball v. Comr., T.C. Memo. 2020-152

During 2012 and 2013 the petitioner participated in a SEP-IRA. Chase Bank (Chase) was the custodian. In 2012, he took two distributions from the account totaling over $200,000.  He had the bank deposit the distributions into a Chase business checking account that he had opened in the name of The Ball Investment Account LLC (Ball LLC), of which he was the sole owner and only member. Importantly, Ball LLC was not a retirement account. The petitioner informed Chase that the distributions were early distributions that were not exempt from tax.  The petitioner made real estate loans with the distributed funds. The first loan was repaid in April 2013 with a check payable to "the Ball SEP Account."  The funds were deposited into the SEP-IRA account. He paid off the second loan in installments in 2012 and 2013.  The payments were made with checks made payable to "the Ball SEP Account.”  Chase, as custodian, had no knowledge of or control over the use that Ball LLC made of the distributions that were deposited in the Ball LLC business checking account.  Chase also didn’t hold or control any documents related to the loans Ball LLC made. Chase issued the petitioner a Form 1099-R for the 2012 tax year reporting that the petitioner had received taxable distributions from the SEP-IRA of $209,600. While the petitioner reported the distributions on his Form 1040, he did not include them in gross income and reported no tax and no tax liability.  The IRS issued a CP2000 Notice stating that the petitioner had failed to report the distributions from Chase Bank and that he therefore owed $67,031 in tax and a substantial-understatement penalty of $13,406. The petitioner did not respond to the Notice, and the IRS then sent him a notice of deficiency that determined the deficiency, additional tax, and penalty due. The Tax Court determined that the petitioner had unfettered control over the distributions, rejecting the petitioner’s “conduit agency arrangement” argument. The Tax Court determined that Ball LLC was not acting as an agent or conduit on behalf of Chase when Ball LLC received and made use of the distributions. The Tax Court noted that Chase had no knowledge of how the distributed funds were used after they were deposited in the Ball LLC account at the petitioner’s direction and that nothing in the record showed that petitioner, who controlled Ball LLC, did not have unfettered control over the distributions. The Tax Court determined that the facts of his case were analogous to those in Vandenbosch v. Comr., T.C. Memo. 2016-29 and, as a result, Ball LLC was not a conduit for Chase. As a result, the IRS position that the distributions should be included in the petitioner’s income was upheld. In addition, the petitioner had not yet reached age 59.5 which meant that he was liable for the 10 percent early distribution penalty. The Tax Court also upheld the accuracy-related penalty. 

New ESA Definition of “Habitat” 

85 Fed. Reg. 81411 (Dec. 16, 2020), effective, Jan. 15, 2021

In response to the U.S. Supreme Court decision in Weyerhaeuser Co. v. United States Fish and Wildlife Service, 139 S. Ct. 361 (2018), the United States Fish and Wildlife Service (USFWS) has modified the definition of “habitat” for listed species under the Endangered Species Act (ESA). The modification is the first change in the definition since the Endangered Species Act’s (ESA) enactment in 1973. Under Weyerhaeuser, the U.S. Supreme Court held that an area being designated as habitat is a prerequisite for a designation as “critical habitat.”  The regulation defines “habitat” as “the abiotic and biotic setting that currently or periodically contains the resources and conditions necessary to support one or more life processes of a species.” Thus, to be “habitat” an area must already contain the conditions necessary to support the species it is intended to be habitat for. Thus, only those areas which include the environmental conditions that can provide benefits to the species at issue (one seeking either a listed or endangered species) will be eligible for critical habitat designation. 

Federal Government Must Pay Farmers Millions For Army Corps of Engineers' Mismanagement of Missouri River. 

Ideker Farms, Inc. v. United States, No. 14-183L, 2020 U.S. Claims LEXIS 2548 (Fed. Cl. Dec. 14, 2020)

In 2014, 400 farmers along the Missouri River from Kansas to North Dakota sued the federal government claiming that the actions of the U.S. Army Corps of Engineers (COE) led to and caused repeated flooding of their farmland along the Missouri River. The farmers alleged that flooding in 2007-2008, 2010-2011, and 2013-2014 constituted a taking requiring that “just compensation” be paid to them under the Fifth Amendment. The litigation was divided into two phases – liability and just compensation. The liability phase was decided in early 2018 when the court determined that some of the 44 landowners selected as bellwether plaintiffs had established the COE’s liability. In that decision, the court held that the COE, in its attempt to balance flood control and its responsibilities under the Endangered Species Act, had released water from reservoirs “during periods of high river flows with the knowledge that flooding was taking place or likely to soon occur.” The court, in that case, noted that the COE had made other changes after 2004 to reengineer the Missouri River and reestablish more natural environments to facilitate species recovery that caused riverbank destabilization which led to flooding. Ultimately, the court, in the earlier litigation, determined that 28 of the 44 landowners had proven the elements of a takings claim – causation, foreseeability and severity. The claims of the other 16 landowners were dismissed for failure to prove causation. The court also determined that flooding in 2011 could not be tied to the COE’s actions and dismissed the claims for that year.

The present case involved a determination of the plaintiffs’ losses and whether the federal government had a viable defense against the plaintiffs’ claims. The court found that the “increased frequency, severity, and duration of flooding post MRRP [Missouri River Recovery Program] changed the character of the representative tracts of land.” The court also stated that, “ [i]t cannot be the case that land that experiences a new and ongoing pattern of increased flooding does not undergo a change in character.” The court determined that three representative plaintiffs, farming operations in northwest Missouri, southwest Iowa and northeast Kansas, were collectively owed more than $7 million for the devaluation of their land due to the establishment of a “permanent flowage easement” that the COE created which constituted a compensable taking under the Fifth Amendment.

The impact of the court’s ruling means that hundreds of landowners affected by flooding in six states are likely entitled to just compensation for the loss of property value due to the new flood patterns that the COE created as part of its MRRP. 

Conclusion

As 2021 unwinds, more issues will occur, many of which will likely involve estate and business entity planning along with income tax planning.

January 24, 2021 in Business Planning, Environmental Law, Income Tax, Regulatory Law | Permalink | Comments (0)

Wednesday, January 20, 2021

Ag Law and Taxation 2020 Bibliography

Overview

Today's post is a bibliography of my ag law and tax blog articles of 2020.  Many of you have requested that I provide something like this to make it easier to find the articles.  If possible, I will do the same for articles from prior years.  The library of content is piling up - I have written more than 500 detailed articles for the blog over the last four and one-half years.

Cataloging the 2020 ag law and tax blog articles - it's the topic of today's post.

BANKRUPTCY

Ag Law and Tax in the Courts – Bankruptcy Debt Discharge; Aerial Application of Chemicals; Start-Up Expenses and Lying as Protected Speech

https://lawprofessors.typepad.com/agriculturallaw/2020/01/ag-law-and-tax-in-the-courts-bankruptcy-debt-discharge-aerial-application-of-chemicals-start-up-expe.html

Unique, But Important Tax Issues – “Claim of Right;” Passive Loss Grouping; and Bankruptcy Taxation

https://lawprofessors.typepad.com/agriculturallaw/2020/01/unique-but-important-tax-issues-claim-of-right-passive-loss-grouping-and-bankruptcy-taxation.html

Disaster/Emergency Legislation – Summary of Provisions Related to Loan Relief; Small Business and Bankruptcy

https://lawprofessors.typepad.com/agriculturallaw/2020/04/disasteremergency-legislation-summary-of-provisions-related-to-loan-relief-small-business-and-bankruptcy.html

Retirement-Related Provisions of the CARES Act

https://lawprofessors.typepad.com/agriculturallaw/2020/04/retirement-related-provisions-of-the-cares-act.html

Farm Bankruptcy – “Stripping, “Claw-Black,” and the Tax Collecting Authorities

https://lawprofessors.typepad.com/agriculturallaw/2020/05/farm-bankruptcy-stripping-claw-back-and-the-tax-collecting-authorities.html

SBA Says Farmers in Chapter 12 Ineligible for PPP Loans

https://lawprofessors.typepad.com/agriculturallaw/2020/06/sba-says-farmers-in-chapter-12-ineligible-for-ppp-loans.html

The “Cramdown” Interest Rate in Chapter 12 Bankruptcy

https://lawprofessors.typepad.com/agriculturallaw/2020/07/the-cramdown-interest-rate-in-chapter-12-bankruptcy.html

Bankruptcy and the Preferential Payment Rule

https://lawprofessors.typepad.com/agriculturallaw/2020/12/bankruptcy-and-the-preferential-payment-rule.html

BUSINESS PLANNING

Partnership Tax Ponderings – Flow-Through and Basis

https://lawprofessors.typepad.com/agriculturallaw/2020/02/partnership-tax-ponderings-flow-through-and-basis.html

Farm and Ranch Estate and Business Planning in 2020 (Through 2025)

https://lawprofessors.typepad.com/agriculturallaw/2020/03/farm-and-ranch-estate-and-business-planning-in-2020-through-2025.html

Transitioning the Farm or Ranch – Stock Redemption

https://lawprofessors.typepad.com/agriculturallaw/2020/07/transitioning-the-farm-or-ranch-stock-redemption.html

Estate and Business Planning for the Farm and Ranch Family – Use of the LLC (Part 1)

https://lawprofessors.typepad.com/agriculturallaw/2020/07/estate-and-business-planning-for-the-farm-and-ranch-family-use-of-the-llc-part-1.html

Estate and Business Planning for the Farm and Ranch Family – Use of the LLC (Part 2)

https://lawprofessors.typepad.com/agriculturallaw/2020/07/estate-and-business-planning-for-the-farm-and-ranch-family-use-of-the-llc-part-two.html

The Use of the LLC for the Farm or Ranch Business – Practical Application

https://lawprofessors.typepad.com/agriculturallaw/2020/08/the-use-of-the-llc-for-the-farm-or-ranch-business-practical-application.html

CIVIL LIABILITIES

Top Ten Agricultural Law and Tax Developments from 2019 (Numbers 10 and 9)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-from-2019-numbers-10-and-9.html

Ag Law in the Courts – Feedlots; Dicamba Drift; and Inadvertent Disinheritance

https://lawprofessors.typepad.com/agriculturallaw/2020/01/ag-law-in-the-courts-feedlots-dicamba-drift-and-inadvertent-disinheritance.html

Ag Law and Tax in the Courts – Bankruptcy Debt Discharge; Aerial Application of Chemicals; Start-Up Expenses and Lying as Protected Speech

https://lawprofessors.typepad.com/agriculturallaw/2020/01/ag-law-and-tax-in-the-courts-bankruptcy-debt-discharge-aerial-application-of-chemicals-start-up-expe.html

Dicamba, Peaches and a Defective Ferrari; What’s the Connection?

https://lawprofessors.typepad.com/agriculturallaw/2020/05/dicamba-peaches-and-a-defective-ferrari-whats-the-connection.html

Liability for Injuries Associated with Horses (and Other Farm Animals)

https://lawprofessors.typepad.com/agriculturallaw/2020/06/liability-for-injuries-associated-with-horses-and-other-farm-animals.html

Issues with Noxious (and Other) Weeds and Seeds

https://lawprofessors.typepad.com/agriculturallaw/2020/09/issues-with-noxious-and-other-weeds-and-seeds.html

Of Nuisance, Overtime and Firearms – Potpourri of Ag Law Developments

https://lawprofessors.typepad.com/agriculturallaw/2020/11/of-nuisance-overtime-and-firearms-potpourri-of-ag-law-developments.html

CONTRACTS

The Statute of Frauds and Sales of Goods

https://lawprofessors.typepad.com/agriculturallaw/2020/01/the-statute-of-frauds-and-sales-of-goods.html

Disrupted Economic Activity and Force Majeure – Avoiding Contractual Obligations in Time of Pandemic

https://lawprofessors.typepad.com/agriculturallaw/2020/04/disrupted-economic-activity-and-force-majeure-avoiding-contractual-obligations-in-time-of-pandemic.html

Is it a Farm Lease or Not? – And Why it Might Matter

https://lawprofessors.typepad.com/agriculturallaw/2020/11/is-it-a-farm-lease-or-not-and-why-it-might-matter.html

COOPERATIVES

Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 2 and 1)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-of-2019-numbers-2-and-1.html

Concentrated Ag Markets – Possible Producer Response?

https://lawprofessors.typepad.com/agriculturallaw/2020/05/concentrated-ag-markets-possible-producer-response.html

CRIMINAL LIABILITIES

Is an Abandoned Farmhouse a “Dwelling”?

https://lawprofessors.typepad.com/agriculturallaw/2020/02/is-an-abandoned-farmhouse-a-dwelling.html

ENVIRONMENTAL LAW

Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 8 and 7)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-of-2019-numbers-8-and-7.html

Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 6 and 5)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-of-2019-numbers-six-and-five.html

Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 4 and 3)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-of-2019-numbers-4-and-3.html

Clean Water Act – Compliance Orders and “Normal Farming Activities”

https://lawprofessors.typepad.com/agriculturallaw/2020/03/clean-water-act-compliance-orders-and-normal-farming-activities.html

Groundwater Discharges of “Pollutants” and “Functional Equivalency”

https://lawprofessors.typepad.com/agriculturallaw/2020/04/groundwater-discharges-of-pollutants-and-functional-equivalency.html

NRCS Highly Erodible Land and Wetlands Conservation Final Rule – Clearer Guidance for Farmers or Erosion of Property Rights? – Part One

https://lawprofessors.typepad.com/agriculturallaw/2020/09/nrcs-highly-erodible-land-and-wetlands-conservation-final-rule-clearer-guidance-for-farmers-or-erosi.html

NRCS Highly Erodible Land and Wetlands Conservation Final Rule – Clearer Guidance for Farmers or Erosion of Property Rights? – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2020/09/nrcs-highly-erodible-land-and-wetlands-conservation-final-rule-clearer-guidance-for-farmers-or-loss-of-property-rights.html

NRCS Highly Erodible Land and Wetlands Conservation Final Rule – Clearer Guidance for Farmers or Erosion of Property Rights? – Part Three

https://lawprofessors.typepad.com/agriculturallaw/2020/09/nrcs-highly-erodible-land-and-wetlands-conservation-final-rule-clearer-guidance-for-farmers-or-loss-of-property-rights-1.html

The Prior Converted Cropland Exception – More Troubles Ahead?

https://lawprofessors.typepad.com/agriculturallaw/2020/09/the-prior-converted-cropland-exception-more-troubles-ahead.html

TMDL Requirements – The EPA’s Federalization of Agriculture

            https://lawprofessors.typepad.com/agriculturallaw/2020/10/tmdl-requirements-.html

Eminent Domain and “Seriously Misleading” Financing Statements

https://lawprofessors.typepad.com/agriculturallaw/2020/10/eminent-domain-and-seriously-misleading-financing-statements.html

 

ESTATE PLANNING

Ag Law in the Courts – Feedlots; Dicamba Drift; and Inadvertent Disinheritance

https://lawprofessors.typepad.com/agriculturallaw/2020/01/ag-law-in-the-courts-feedlots-dicamba-drift-and-inadvertent-disinheritance.html

Recent Developments Involving Estates and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2020/02/recent-developments-involving-decedents-estates-and-trusts.html

What is a “Trade or Business” For Purposes of Installment Payment of Federal Estate Tax?

https://lawprofessors.typepad.com/agriculturallaw/2020/03/what-is-a-trade-or-business-for-purposes-of-installment-payment-of-federal-estate-tax.html

Alternate Valuation – Useful Estate Tax Valuation Provision

https://lawprofessors.typepad.com/agriculturallaw/2020/03/alternate-valuation-useful-estate-tax-valuation-provision.html

Farm and Ranch Estate and Business Planning in 2020 (Through 2025)

https://lawprofessors.typepad.com/agriculturallaw/2020/03/farm-and-ranch-estate-and-business-planning-in-2020-through-2025.html

Retirement-Related Provisions of the CARES Act

https://lawprofessors.typepad.com/agriculturallaw/2020/04/retirement-related-provisions-of-the-cares-act.html

Are Advances to Children Loans or Gifts?

https://lawprofessors.typepad.com/agriculturallaw/2020/06/are-advances-to-children-loans-or-gifts.html

Tax Issues Associated with Options in Wills and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2020/06/tax-issues-associated-with-options-in-wills-and-trusts.html

Valuing Farm Chattels and Marketing Rights of Farmers

https://lawprofessors.typepad.com/agriculturallaw/2020/06/valuing-farm-chattels-and-marketing-rights-of-farmers.html

Is it a Gift or Not a Gift? That is the Question

https://lawprofessors.typepad.com/agriculturallaw/2020/06/is-it-a-gift-or-not-a-gift-that-is-the-question.html

Does a Discretionary Trust Remove Fiduciary Duties a Trustee Owes Beneficiaries?

https://lawprofessors.typepad.com/agriculturallaw/2020/10/does-a-discretionary-trust-remove-fiduciary-duties-a-trustee-owes-beneficiaries.html

Can I Write my Own Will? Should I?

https://lawprofessors.typepad.com/agriculturallaw/2020/10/can-i-write-my-own-will-should-i.html

Income Taxation of Trusts – New Regulations

https://lawprofessors.typepad.com/agriculturallaw/2020/10/income-taxation-of-trusts.html

Merging a Revocable Trust at Death with an Estate – Tax Consequences

https://lawprofessors.typepad.com/agriculturallaw/2020/11/merging-a-revocable-trust-at-death-with-an-estate-tax-consequences.html

When is Transferred Property Pulled Back into the Estate at Death?  Be on Your Bongard!

https://lawprofessors.typepad.com/agriculturallaw/2020/11/when-is-transferred-property-pulled-back-into-the-estate-at-death-be-on-your-bongard.html

‘Tis the Season for Giving, But When is a Transfer a Gift?

https://lawprofessors.typepad.com/agriculturallaw/2020/12/tis-the-season-for-giving-but-when-is-a-transfer-a-gift.html

 

INCOME TAX

Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 2 and 1)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-of-2019-numbers-2-and-1.html

Does the Penalty Relief for a “Small Partnership” Still Apply?

https://lawprofessors.typepad.com/agriculturallaw/2020/01/does-the-penalty-relief-for-a-small-partnership-still-apply.html

Substantiation – The Key to Tax Deductions

https://lawprofessors.typepad.com/agriculturallaw/2020/01/substantiation-the-key-to-tax-deductions.html

Ag Law and Tax in the Courts – Bankruptcy Debt Discharge; Aerial Application of Chemicals; Start-Up Expenses and Lying as Protected Speech

https://lawprofessors.typepad.com/agriculturallaw/2020/01/ag-law-and-tax-in-the-courts-bankruptcy-debt-discharge-aerial-application-of-chemicals-start-up-expe.html

Unique, But Important Tax Issues – “Claim of Right;” Passive Loss Grouping; and Bankruptcy Taxation

https://lawprofessors.typepad.com/agriculturallaw/2020/01/unique-but-important-tax-issues-claim-of-right-passive-loss-grouping-and-bankruptcy-taxation.html

Conservation Easements and the Perpetuity Requirement

https://lawprofessors.typepad.com/agriculturallaw/2020/02/conservation-easements-and-the-perpetuity-requirement.html

Tax Treatment Upon Death of Livestock

https://lawprofessors.typepad.com/agriculturallaw/2020/02/tax-treatment-upon-death-of-livestock.html

What is a “Trade or Business” For Purposes of I.R.C. §199A?

https://lawprofessors.typepad.com/agriculturallaw/2020/02/what-is-a-trade-or-business-for-purposes-of-irc-199a.html

Tax Treatment of Meals and Entertainment

https://lawprofessors.typepad.com/agriculturallaw/2020/03/tax-treatment-of-meals-and-entertainment.html

Farm NOLs Post-2017

            https://lawprofessors.typepad.com/agriculturallaw/2020/03/farm-nols-post-2017.html

Disaster/Emergency Legislation – Summary of Provisions Related to Loan Relief; Small Business and Bankruptcy

https://lawprofessors.typepad.com/agriculturallaw/2020/04/disasteremergency-legislation-summary-of-provisions-related-to-loan-relief-small-business-and-bankruptcy.html

Retirement-Related Provisions of the CARES Act

https://lawprofessors.typepad.com/agriculturallaw/2020/04/retirement-related-provisions-of-the-cares-act.html

Income Tax-Related Provisions of Emergency Relief Legislation

https://lawprofessors.typepad.com/agriculturallaw/2020/04/income-tax-related-provisions-of-emergency-relief-legislation.html

The Paycheck Protection Program – Still in Need of Clarity

https://lawprofessors.typepad.com/agriculturallaw/2020/05/the-paycheck-protection-program-still-in-need-of-clarity.html

Solar “Farms” and The Associated Tax Credit

https://lawprofessors.typepad.com/agriculturallaw/2020/05/solar-farms-and-the-associated-tax-credit.html

Obtaining Deferral for Non-Deferred Aspects of an I.R.C. §1031 Exchange

https://lawprofessors.typepad.com/agriculturallaw/2020/05/obtaining-deferral-for-non-deferred-aspects-of-an-irc-1031-exchange-.html

Conservation Easements – The Perpetuity Requirement and Extinguishment

https://lawprofessors.typepad.com/agriculturallaw/2020/05/conservation-easements-the-perpetuity-requirement-and-extinguishment.html

PPP and PATC Developments

https://lawprofessors.typepad.com/agriculturallaw/2020/06/ppp-and-patc-developments.html

How Many Audit “Bites” of the Same Apple Does IRS Get?

https://lawprofessors.typepad.com/agriculturallaw/2020/07/how-many-audit-bites-of-the-same-apple-does-irs-get.html

More Developments Concerning Conservation Easements

https://lawprofessors.typepad.com/agriculturallaw/2020/07/more-developments-concerning-conservation-easements.html

Imputation – When Can an Agent’s Activity Count?

https://lawprofessors.typepad.com/agriculturallaw/2020/07/imputation-when-can-an-agents-activity-count.html

Exotic Game Activities and the Tax Code

https://lawprofessors.typepad.com/agriculturallaw/2020/08/exotic-game-activities-and-the-tax-code.html

Demolishing Farm Buildings and Structures – Any Tax Benefit?

         https://lawprofessors.typepad.com/agriculturallaw/2020/08/demolishing-farm-buildings-and-structures-any-tax-benefit.html

Tax Incentives for Exported Ag Products

https://lawprofessors.typepad.com/agriculturallaw/2020/08/tax-incentives-for-exported-ag-products.html

Deducting Business Interest

https://lawprofessors.typepad.com/agriculturallaw/2020/09/deducting-business-interest.html

Recent Tax Court Opinions Make Key Point on S Corporations and Meals/Entertainment Deductions

https://lawprofessors.typepad.com/agriculturallaw/2020/09/recent-tax-court-opinions-make-key-points-on-s-corporations-and-mealsentertainment-deductions.html

Income Taxation of Trusts – New Regulations

https://lawprofessors.typepad.com/agriculturallaw/2020/10/income-taxation-of-trusts.html

Accrual Accounting – When Can a Deduction Be Claimed?

https://lawprofessors.typepad.com/agriculturallaw/2020/11/accrual-accounting-when-can-a-deduction-be-claimed.html

Farmland Lease Income – Proper Tax Reporting

https://lawprofessors.typepad.com/agriculturallaw/2020/11/farmland-lease-income-proper-tax-reporting.html

Merging a Revocable Trust at Death with an Estate – Tax Consequences

https://lawprofessors.typepad.com/agriculturallaw/2020/11/merging-a-revocable-trust-at-death-with-an-estate-tax-consequences.html

The Use of Deferred Payment Contracts – Specifics Matter

https://lawprofessors.typepad.com/agriculturallaw/2020/11/the-use-of-deferred-payment-contracts-specific-matters.html

Is Real Estate Held in Trust Eligible for I.R.C. §1031 Exchange Treatment?

https://lawprofessors.typepad.com/agriculturallaw/2020/11/is-real-estate-held-in-trust-eligible-for-irc-1031-exchange-treatment.html

 

INSURANCE

Recent Court Developments of Interest

https://lawprofessors.typepad.com/agriculturallaw/2020/07/recent-court-developments-of-interest.html

PUBLICATIONS

Principles of Agricultural Law

https://lawprofessors.typepad.com/agriculturallaw/2020/01/principles-of-agricultural-law.html

 

REAL PROPERTY

Signing and Delivery

https://lawprofessors.typepad.com/agriculturallaw/2020/02/deed-effectiveness-signing-and-delivery.html

Abandoned Railways and Issues for Adjacent Landowners

https://lawprofessors.typepad.com/agriculturallaw/2020/04/abandoned-railways-and-issues-for-adjacent-landowners.html

Obtaining Deferral for Non-Deferred Aspects of an I.R.C. §1031 Exchange

https://lawprofessors.typepad.com/agriculturallaw/2020/05/obtaining-deferral-for-non-deferred-aspects-of-an-irc-1031-exchange-.html

Are Dinosaur Fossils Minerals?

https://lawprofessors.typepad.com/agriculturallaw/2020/06/are-dinosaur-fossils-minerals.html

Real Estate Concepts Involved in Recent Cases

https://lawprofessors.typepad.com/agriculturallaw/2020/10/real-estate-concepts-involved-in-recent-cases.html

Is it a Farm Lease or Not? – And Why it Might Matter

https://lawprofessors.typepad.com/agriculturallaw/2020/11/is-it-a-farm-lease-or-not-and-why-it-might-matter.html

 

REGULATORY LAW

Top Ten Agricultural Law and Tax Developments from 2019 (Numbers 10 and 9)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-from-2019-numbers-10-and-9.html

Top Ten Agricultural Law and Tax Developments from 2019 (Number 8 and 7)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-of-2019-numbers-8-and-7.html

Ag Law and Tax in the Courts – Bankruptcy Debt Discharge; Aerial Application of Chemicals; Start-Up Expenses and Lying as Protected Speech

https://lawprofessors.typepad.com/agriculturallaw/2020/01/ag-law-and-tax-in-the-courts-bankruptcy-debt-discharge-aerial-application-of-chemicals-start-up-expe.html

Hemp Production – Regulation and Economics

https://lawprofessors.typepad.com/agriculturallaw/2020/04/hemp-production-regulation-and-economics.html

DOJ to Investigate Meatpackers – What’s it All About?

https://lawprofessors.typepad.com/agriculturallaw/2020/05/doj-to-investigate-meatpackers-whats-it-all-about.html

Dicamba Registrations Cancelled – Or Are They?

https://lawprofessors.typepad.com/agriculturallaw/2020/06/dicamba-registrations-cancelled-or-are-they.html

What Does a County Commissioner (Supervisor) Need to Know?

https://lawprofessors.typepad.com/agriculturallaw/2020/06/what-does-a-county-commissioner-supervisor-need-to-know.html

The Supreme Court’s DACA Opinion and the Impact on Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2020/07/the-supreme-courts-daca-opinion-and-the-impact-on-agriculture.html

Right-to-Farm Law Headed to the SCOTUS?

https://lawprofessors.typepad.com/agriculturallaw/2020/08/right-to-farm-law-headed-to-the-scotus.html

The Public Trust Doctrine – A Camel’s Nose Under Agriculture’s Tent?

https://lawprofessors.typepad.com/agriculturallaw/2020/10/the-public-trust-doctrine-a-camels-nose-under-agricultures-tent.html

Roadkill – It’s What’s for Dinner (Reprise)

https://lawprofessors.typepad.com/agriculturallaw/2020/10/roadkill-its-whats-for-dinner-reprise.html

Beef May be for Dinner, but Where’s It From?

https://lawprofessors.typepad.com/agriculturallaw/2020/11/beef-may-be-for-dinner-but-wheres-it-from.html

Of Nuisance, Overtime and Firearms – Potpourri of Ag Law Developments

https://lawprofessors.typepad.com/agriculturallaw/2020/11/of-nuisance-overtime-and-firearms-potpourri-of-ag-law-developments.html

What Farm Records and Information Are Protected from a FOIA Request?

https://lawprofessors.typepad.com/agriculturallaw/2020/12/what-farm-records-and-information-are-protected-from-a-foia-request.html

Can One State Dictate Agricultural Practices in Other States?

https://lawprofessors.typepad.com/agriculturallaw/2020/12/can-one-state-dictate-agricultural-practices-in-other-states.html

SECURED TRANSACTIONS

Family Farming Arrangements and Liens; And, What’s a Name Worth?

https://lawprofessors.typepad.com/agriculturallaw/2020/02/family-farming-arrangements-and-liens-and-whats-a-name-worth.html

Conflicting Interests in Stored Grain

https://lawprofessors.typepad.com/agriculturallaw/2020/03/conflicting-interests-in-stored-grain.html

Eminent Domain and “Seriously Misleading” Financing Statement

https://lawprofessors.typepad.com/agriculturallaw/2020/10/eminent-domain-and-seriously-misleading-financing-statements.html

 

SEMINARS AND CONFERENCES

Summer 2020 Farm Income Tax/Estate and Business Planning Conference

https://lawprofessors.typepad.com/agriculturallaw/2020/02/summer-2020-farm-income-taxestate-and-business-planning-conference.html

Registration Open for Summer Ag Income Tax/Estate and Business Planning Seminar

https://lawprofessors.typepad.com/agriculturallaw/2020/03/registration-open-for-summer-ag-income-taxestate-and-business-planning-seminar.html

 

Summer 2020 – National Farm Income Tax/Estate and Business Planning Conference

https://lawprofessors.typepad.com/agriculturallaw/2020/04/summer-2020-national-farm-income-taxestate-and-business-planning-conference.html

Year-End CPE/CLE – Six More to Go

https://lawprofessors.typepad.com/agriculturallaw/2020/12/year-end-cpecle-six-more-to-go.html

2021 Summer National Farm and Ranch Income Tax/Estate and Business Planning Conference

https://lawprofessors.typepad.com/agriculturallaw/2020/12/2021-summer-national-farm-income-taxestate-business-planning-conference.html

WATER LAW

Principles of Agricultural Law

https://lawprofessors.typepad.com/agriculturallaw/2020/01/principles-of-agricultural-law.html

MISCELLANEOUS

More “Happenings” in Ag Law and Tax

https://lawprofessors.typepad.com/agriculturallaw/2020/02/more-happenings-in-ag-law-and-tax.html

Recent Cases of Interest

            https://lawprofessors.typepad.com/agriculturallaw/2020/03/recent-cases-of-interest.html

More Selected Caselaw Developments of Relevance to Ag Producers

https://lawprofessors.typepad.com/agriculturallaw/2020/03/more-selected-caselaw-developments-of-relevance-to-ag-producers.html

Court Developments of Interest

https://lawprofessors.typepad.com/agriculturallaw/2020/04/court-developments-of-interest.html

Ag Law and Tax Developments

https://lawprofessors.typepad.com/agriculturallaw/2020/05/ag-law-and-tax-developments.html

Recent Court Developments of Interest

https://lawprofessors.typepad.com/agriculturallaw/2020/07/recent-court-developments-of-interest.html

Court Developments in Agricultural Law and Taxation

https://lawprofessors.typepad.com/agriculturallaw/2020/08/court-developments-in-agricultural-law-and-taxation.html

Ag Law and Tax in the Courtroom

https://lawprofessors.typepad.com/agriculturallaw/2020/09/ag-law-and-tax-in-the-courtroom.html

Recent Tax Cases of Interest

https://lawprofessors.typepad.com/agriculturallaw/2020/09/recent-tax-cases-of-interest.html

Ag and Tax in the Courts

 https://lawprofessors.typepad.com/agriculturallaw/2020/11/ag-and-tax-in-the-courts.html

Of Nuisance, Overtime and Firearms – Potpourri of Ag Law Developments

https://lawprofessors.typepad.com/agriculturallaw/2020/11/of-nuisance-overtime-and-firearms-potpourri-of-ag-law-developments.html

Bankruptcy Happenings

            https://lawprofessors.typepad.com/agriculturallaw/2020/12/bankruptcy-happenings.html

January 20, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Sunday, January 17, 2021

Agricultural Law Online!

Overview

For the Spring 2021 academic semester, Kansas State University will be offering my Agricultural Law and Economics course online. No matter where you are located, you can enroll in the course and participate in it as if you were present with the students in the on-campus classroom.

Details of this spring semester’s online Ag Law course – that’s the topic of today’s post.

Course Coverage

The course provides a broad overview of many of the issues that a farmer, rancher, rural landowner, ag lender or other agribusiness will encounter on a daily basis. As a result, the course looks at contract issues for the purchase and sale of agricultural goods; the peril of oral contracts; the distinction between a lease and a contract (and why the distinction matters); and the key components of a farm lease, hunting lease, wind energy lease, oil and gas lease, and other types of common agricultural contractual matters. What are the rules surrounding ag goods purchased at auction?

Ag financing situations are also covered – what it takes to provide security to a lender when financing the purchase of personal property to be used in the farming business. In addition, the unique rules surrounding farm bankruptcy is covered, including the unique tax treatment provided to a farmer in Chapter 12 bankruptcy.

Of course, farm income tax is an important part of the course. Tax planning is perhaps the most important aspect of the farming business that every-day decisions have an impact on and are influenced by. As readers of this blog know well, farm tax issues are numerous and special rules apply in many instances. The new tax law impacts many areas of farm income tax.

Real property legal issues are also prevalent and are addressed in the course. The key elements of an installment land contract are covered, as well as legal issues associated with farm leases. Various types of interests in real estate are explained – easements; licenses; profits, fee simples, remainders, etc. Like-kind exchange rules are also covered as are the special tax rules (at the state level) that apply to farm real estate.

A big issue for some farmers and ranchers concerns abandoned railways, and those issues are covered in the course. What if an existing fence is not on the property line?

Farm estate and business planning is also a significant emphasis of the course. What’s the appropriate estate plan for a farm and ranch family? How should the farming business be structured? Should multiple entities be used? Why does it matter? These questions, and more, are addressed.

Agricultural cooperatives are important for the marketing of agricultural commodities. How a cooperative is structured and works and the special rules that apply are also discussed.

Because much agricultural property is out in the open, that means that personal liability rules come into play with respect to people that come onto the property or use farm property in the scope of their employment. What are the rules that apply in those situations? What about liability rules associated with genetically modified products? Ag chemicals also pose potential liability issues, as do improperly maintained fences? What about defective ag seed or purchased livestock that turns out to not live up to representations? These issues, and more, are covered in the scope of discussing civil liabilities.

Sometimes farmers and ranchers find themselves in violation of criminal laws. What are those common situations? What are the rules that apply? We will get into those issue too.

Water law is a very big issue, especially in the western two-thirds of the United States. We will survey the rules surrounding the allocation of surface water and ground water to agricultural operations.

Ag seems to always be in the midst of many environmental laws – the “Clean Water Rule” is just one of those that has been high-profile in recent years. We will talk about the environmental rules governing air, land, and water quality as they apply to farmers, ranchers and rural landowners.

Finally, we will address the federal (and state) administrative state and its rules that apply to farming operations. Not only will federal farm programs be addressed, but we will also look at other major federal regulations that apply to farmers and ranchers.

Further Information and How to Register

Information about the course and how to register is available here:  https://www.enrole.com/ksu/jsp/session.jsp?sessionId=442107&courseId=AGLAW&categoryId=ROOT

You can also find information about the text for the course at the following link:  https://washburnlaw.edu/practicalexperience/agriculturallaw/waltr/principlesofagriculturallaw/index.html

If you are an undergraduate student at an institution other than Kansas State, you should be able to enroll in this course and have it count as credit towards your degree at your institution.  Consult with your academic advisor to see how Ag Law and Economics will transfer and align with your degree completion goals.

If you have questions, you can contact me directly, or submit your questions to the KSU Global Campus staff at the link provided above.

I hope to see you in class beginning on January 26!

January 17, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Friday, January 8, 2021

Continuing Education Events and Summer Conferences

Overview

There are a couple of online continuing education events that I will be conducting soon, and the dates are set for two summer national conferences in 2021. 

Upcoming continuing education events – it’s the topic of today’s post.

Top Developments in Agricultural Law and Tax

On Monday, January 11, beginning at 11:00 a.m. (cst), I will be hosting a two-hour CLE/CPE webinar on the top developments in agricultural law and agricultural taxation of 2020.  I will not only discuss the developments, but project how the developments will impact producers and others in the agricultural sector and what steps need to be taken as a result of the developments in the law and tax realm.  This is an event that is not only for practitioners, but producers also.  It’s an opportunity to hear the developments and provide input and discussion.  A special lower rate is provided for those not claiming continuing education credit.

You may learn more about the January 11 event and register here:  https://washburnlaw.edu/employers/cle/taxseasonupdate.html

Tax Update Webinar – CAA of 2021

On January 21, I will be hosting a two-hour webinar on the Consolidated Appropriations Act, 2021.  This event will begin at 10:00 a.m. (cst) and run until noon.  The new law makes significant changes to the existing PPP and other SBA loan programs, CFAP, and contains many other provisions that apply to businesses and individuals.  Also, included in the new law are provisions that extend numerous provisions that were set to expire at the end of 2020.  The PPP discussion is of critical importance to many taxpayers at the present moment, especially the impact of PPP loans not being included in income and simultaneously being deductible if used to pay for qualified business expenses.  Associated income tax basis issues loom large and vary by entity type.

You may learn more about the January 21 event and register here:  https://agmanager.info/events/kansas-income-tax-institute

Summer National Conferences

Mark your calendars now for the law school’s two summer 2021 events that I conduct on farm income tax and farm estate and business planning.  Yes, there are two locations for 2021 – one east and one west.  Each event will be simulcast live over the web if you aren’t able to attend in-person.  The eastern conference is first and is set for June 7-8 at Shawnee Lodge and Conference Center near West Portsmouth, Ohio.  The location is about two hours east of Cincinnati, 90 minutes south of Columbus, Ohio, and just over two hours from Lexington, KY.  I am presently in the process of putting the agenda together.  A room block will be established for those interested in staying at the Lodge.  For more information about Shawnee Lodge and Conference Center, you made click here:  https://www.shawneeparklodge.com/

The second summer event will be held on August 2-3 in Missoula, Montana at the Hilton Garden Inn.  Missoula is beautifully situated on three rivers and in the midst of five mountain ranges.  It is also within three driving hours of Glacier National Park, and many other scenic and historic places.  The agenda will soon be available, and a room block will also be established at the hotel.  You may learn more about the location here:  https://www.hilton.com/en/hotels/msogigi-hilton-garden-inn-missoula/

Conclusion

Take advantage of the upcoming webinars and mark you calendars for the summer national events.  I look for to seeing you at one or more of the events.

January 8, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Saturday, December 19, 2020

2021 Summer National Farm and Ranch Income Tax/Estate & Business Planning Conference

Overview

The curtain has dropped on my 2020 agricultural law and taxation “tour.”  As I write this, I am in transit returning to Kansas (and then Iowa) from the last stop of 2020 in San Angelo, Texas.  Many of you have already asked about the 2021 National Summer Farm/Ranch Income Tax/Estate and Business Planning Conference. 

In today’s article, I take a moment to mention an upcoming event and the summer conference(s). 

January Webinar

On January 11, 2021, I will be doing a live webinar worth two hours of CLE/CPE credit on the biggest developments in agricultural law and taxation during 2020.  I will also examine other significant developments and what the forthcoming legal and tax issues facing agriculture in the immediate future might be.  This webinar is for lawyers and other tax practitioners as wells as farmer, ranchers, agribusiness professionals, rural landowners, ag media and any others that have an interest in what is going on in the legal and tax world that affects agricultural production and land ownership.  I will dive into constitutional issues involving property rights; water law; environmental law and regulation, income tax issues; farm programs; and other legal and tax issues of importance.

You can learn more about and register for the January 11 event here:  https://washburnlaw.edu/employers/cle/taxseasonupdate.html

Summer 2021 Conferences

Ohio conference.  Two national conferences are being planned for the summer of 2021.  The first event will be in Ohio either at the Salt Fork State Park Lodge and Conference Center near Cambridge, Ohio or at the Shawnee Lodge and Conference Center near Portsmouth, Ohio.  The dates will be either June 1-2; June 7-8 or June 14-15.  I am presently waiting on confirmation that the technology at the locations can meet our needs to provide a high-quality live simulcast of the conference over the internet.  I will announce the dates and location as soon as I have the details finalized, which should be by the end of this month.

You can learn more about the two possible Ohio locations here:  https://www.shawneeparklodge.com/; https://www.saltforkparklodge.com/.

Missoula, Montana.  The second summer national conference will be held in Missoula, Montana on August 2-3.  You can learn more about the venue for the Montana conference here:   https://www.hilton.com/en/hotels/msogigi-hilton-garden-inn-missoula/.   It will also be simulcast live over the internet.

 As the program details are put together, I will provide more details.  Stay tuned.

December 19, 2020 in Business Planning, Estate Planning, Income Tax | Permalink | Comments (0)

Sunday, December 6, 2020

Year-End CPE/CLE – Six More to Go

Overview

As 2020 winds down so do my continuing education events for the year.  These late year events are important for practitioners that need additional education credit by the end of the year.  I have six more events remaining this year, some in-person and some online.  One event is a two-hour ethics session for those still needing ethics credit before the year ends.

Year-end continuing education opportunities – it’s the topic of today’s post.

Upcoming Events

This week finds me in Salina, Kansas for the second day of a two-day professional tax training event.  This is a comprehensive conference digging into the specifics of what practitioners need to know for preparing 2020 tax returns for clients.  Included will be up-to-the-minute relevant developments from the courts and the IRS as well as all trust return preparation issues and examples.  More information about the Salina event can be found here:  https://www.agmanager.info/events/kansas-income-tax-institute.

Later this week, on Wednesday, I will be speaking at the AICPA Agriculture Conference.  This national conference is online.  I will be speaking on financial distress tax and non-tax issues facing farmers and ranchers that are struggling financially.  You can learn more about this event here:  https://future.aicpa.org/cpe-learning/conference/aicpa-agriculture-conference.  The next day, I will be doing another Day 2 of a tax conference.  This event will be online, originating from the campus of Kansas State University (KSU).  This is an approved NASBA event.  Thus, CPAs can receive CPE credit for viewing online.  You can learn more about this event here:  https://www.agmanager.info/events/kansas-income-tax-institute

On Friday, I will be doing a two-hour tax ethics session.  This session originates from Washburn Law School and will involve discussion of ethical issues that tax practitioners face when representing clients with tax issues and the preparation of returns.  Also, addressed will be Circular 230 issues and various ethical rules that CPAs and lawyers are subject to when representing clients.  More information about the ethics event can be found here:  https://washburnlaw.edu/employers/cle/taxethics.html.

The following week finds me in San Angelo, TX on December 17 and 18.  This event is sponsored by the San Angelo Chapter of the Texas Society of CPAs.  I will focus on farm estate and business planning as well as farm income tax.  More information about this event can be found here:  https://www.tscpa.org/sanangelo/news/details/2020/11/05/dec.-17---farm-and-ranch-estate-and-business-planning and here: https://www.tscpa.org/sanangelo/news/details/2020/11/05/dec.-17---farm-and-ranch-income-tax-update.  The San Angelo event is my last scheduled event for the year.  It’s been quite a year.  While all of my professional engagements moved online from mid-March until mid-June, about half of them remained online since mid-June.  I start out on the road during the first week of January 2021. 

2021 summer events are being planned for Missoula, Montana as well as east Tennessee.  There possibly will be a third national event in late September.  I also do a number of in-house CPA and law firm training each year.  If your firm is looking for in-house training in 2021 and have an interest in what I can offer, please contact me and I will do my best to get you on the calendar. 

Also, tune in to RFD-TV/SiriusXM each week to hear the hosts interview me concerning various ag law and tax topics.  You can also find me every other Monday morning at 6:00 a.m. (central) on WIBW radio (580 a.m.) and every other Wednesday on KFRM 550 a.m. discussing the biggest and most critical developments in agricultural law and taxation.  All of these shows are captured and posted to the media page of the Washburn Agricultural Law and Tax Report – www.washburnlaw.edu/waltr.

Conclusion

2020 has been a challenge for many and has involved modifying the practice of law and/or tax and how client representation is engaged in.  It’s also been a challenge given the new virus-related legislation and the frequent changes that have come by way of questions and answers and various notices, news releases and postings on the IRS website.  Strange times, indeed.

Stay tuned.

December 6, 2020 in Business Planning, Estate Planning, Income Tax | Permalink | Comments (0)

Saturday, November 21, 2020

When Is Transferred Property Pulled Back Into the Estate At Death? Be on Your Bongard!

Overview

When the federal estate tax exemption was much lower than it is now, gifting property played a much greater role in estate planning than it does now.  That gifting could consist of either an outright gift of property or a gift of an interest in an entity.  In either situation, the basic idea was to transfer value away, typically to other family members to keep the transferor’s estate at death beneath the level of the available estate tax exemption at death so that federal estate tax could be avoided. 

However, if a transfer isn’t done correctly, it runs the risk of being pulled back into the decedent’s estate and subjected to federal estate tax at death. 

Avoiding transferred property being included in a decedent’s estate at death – it’s the topic of today’s post.

Tax Code Provision and Tax Court Test

Under I.R.C. §2036, the value of a decedent’s gross estate includes the value of all property to the extent that the decedent had an interest in the property at the time of death.  That includes property that the decedent transferred but retained for life, or for any period of time tied to the decedent’s death the possession or enjoyment of the property.  I.R.C. §2036 also catches a retained right to receive income from the property or the right to designate who possesses the property or the income from the property.  The same is true for a retained right to vote stock of a corporation the decedent controls. 

When will a transfer be respected so that the transferred property will not be included in the transferor’s estate at death?  In Estate of Bongard v. Comr., 124 T.C. 95 (2005), the Tax Court set forth the standard concerning how to determine whether I.R.C. §2036 pulls property back into a decedent's estate. According to the Tax Court, transferred property will be pulled back into the decedent’s estate if the decedent made a transfer of property during life that was not a bona fide sale for adequate and full consideration, and the decedent retained an interest or right in the transferred property.  A sale is bona fide only if the evidence establishes the existence of a legitimate and significant nontax reason exists for the transfer.

Recent Case

The Tax Court’s Bongard standard was at issue in another Tax Court case decided earlier this year.  In Estate of Moore, T.C. Memo. 2020-40, the decedent, at age 88 in late 2004, started negotiations with prospective buyers for the sale of his farm.  However, before he could get the farm sold, he suffered a heart attack and was diagnosed with congestive heath failure.  Doctors told him that he wouldn’t live longer than six months.  Within a week after being discharged from the hospital, and while in in-home hospice care, the decedent worked with an attorney to formalize an estate plan – something he really hadn’t done up to this point in time.  His primary goal was to eliminate potential estate tax.  However, he also wanted to maintain control.  Those two goals can prove difficult to satisfy simultaneously. 

Ultimately, the attorney created various trust for the decedent – a revocable living trust; a charitable lead annuity trust; a trust for his children; a management trust; an irrevocable trust (also for the benefit of his children); and a family limited partnership (FLP).  The management trust (which made a nominal contribution to the FLP upon its formation) held a 1 percent general partner interest in the FLP.  The decedent held a 95 percent limited partnership interest in the FLP.  Each of his four children held a 1 percent limited partner interest. Purportedly, the purpose of the FLP was to provide protection against liability; protection against creditors; bad marriages; and to bring together a dysfunctional family.  Under the terms of the FLP agreement, no single partner could transfer any interest unless all partners agreed.

The decedent transferred all of his property (the farmland and his personal property) to the revocable living trust.  The trust contained a formula that transferred a part of the trust assets to the charitable trust with the goal of causing the least amount of federal estate tax to the estate.  Everything else, after payment of taxes and claims and distributions of specific bequests were specified to pass to the trust for the children.  The management trust held a 1 percent interest as a general partner in the FLP and, upon the decedent’s death, that interest was to be distributed to the trust for his children.  The decedent then transferred (via the revocable living trust) an 80 percent interest in his farmland and $1.8 million worth of assets to the FLP. 

Five days after forming the FLP, and within two months of his death, the decedent sold the farm for almost $17 million.  The FLP and the revocable trust transferred their respective interests in the farmland to the buyer.  The terms of sale allowed the decedent to continue to live on the farm and operate it (in accordance with his capability) until his death. 

After the sale, the decedent directed the FLP to transfer $500,000 to each of his four children in return for a five-year promissory note at a 3.6 percent interest rate per annum.  However, there was no amortization schedule for any of the notes, and none of the children made any payments.  Also, the FLP never attempted to collect on the notes, and the attorney that prepared the estate plan told the children that they didn’t have to pay on the notes.  The FLP then distributed (purportedly a loan) $2 million to the revocable living trust, that the decedent used to pay expenses, including the balance of the $320,000 attorney fee charged to set up all of the trusts and the FLP, and the tax obligation on the sale of the farm. 

Additionally, in late February 2005, the living trust transferred $500,000 to the irrevocable trust, which was treated as a $125,000 gift to each of the four children. Lastly, in early March 2005, the living trust transferred its entire limited interest in the FLP to the irrevocable trust in return for $500,000 cash and a note for $4.8 million. The decedent died in late March of 2005.

The decedent's federal estate tax return reported $53,875 for the management trust's 1% general partnership interest in the FLP; $4.8 million for the note receivable from the irrevocable trust; claimed a $2 million deduction for the debt owed to the FLP and a $4.8 million deduction for a charitable contribution to the charitable trust.  It also reported $1.5 million in taxable gifts; and $475,000 deduction for attorneys' fees associated with the administration of the decedent's estate (reported on Schedule J (the form where estate administration deductions are claimed), which was in addition to the $320,000 charged for establishing the estate plan).

The estate also filed a federal gift tax return for 2005. The return reported gifts of $125,000 for each of the decedent's children in the form of the $500,000 transfer to the irrevocable trust earlier that year.

The IRS issued a notice of deficiency to the estate determining a deficiency of nearly $6.4 million. Additionally, the IRS issued a notice of deficiency determining a gift tax liability of more than $1.3 million for the 2005 tax year.  While the Tax Court was tasked with addressing numerous legal/tax issues, a primary one was whether the value of the farm should be included in the decedent’s estate for tax purposes. 

The Bongard Application

Business purpose.  As noted above, one of the tests established by the Bongard decision is whether a transfer was made for a nontax business purpose.  That is usually evidenced by active management of the transferred asset(s).  But here, the Tax Court noted, the decedent sold the farm days after he transferred it to the FLP.  That meant that there was no business for the children to manage.  Only liquid assets remained in the FLP that the children did not manage.  Instead, and investment advisor was hired to manage the liquid assets.  Also, based on the evidence, there was no legitimate concern about creditor claims (another legitimate purpose for creating the FLP). In addition, the entire estate plan (including the formation of the FLP) was done in the imminence of death as part of a scheme to avoid tax.  The whole plan reeked of being testamentary in nature.

Retained interest.  Also, part of the Bongard test is that the decedent must not retain an interest in the transferred property.  But the Tax Court determined that the decedent had at least an implied agreement to retain possession or enjoyment of the farm property.  Indeed, he continued to live at the farm and made management decisions up to his death and treated the other FLP assets as his own by paying personal expenses (including attorney fees) with them and using FLP assets for making loans to his children.  In essence, he treated the FLP as his pocketbook. 

The retained possession or enjoyment of the transferred property along with the lack of a substantial nontax purpose caused inclusion of the farm property in the decedent’s gross estate at death.  The amount included in the estate was calculated as the value of the farm as of the date of death less the funds that left the estate between the time of the sale and the date of death.  I.R.C. §2043.

Other Issues

The Tax Court also determined that the “loan” from the FLP to the revocable living trust was not really a loan, thereby wiping out an estate tax deduction for the $2 million loan. There was nothing that indicated that it was a loan – no note; no interest; no collateral; no maturity date specified; and no payments were made or demanded. 

The Tax Court also agreed with the IRS that the “loans” to the children were gifts.  Again, like the purported loan from the FLP to the revocable living trust, there was nothing to indicate that the transfers to the children were anything other than gifts.  Those total gifts of about $2 million caused the additional gift tax to be included in the decedent’s estate as gifts within three years of death.  I.R.C. §2035(b). 

Conclusion

The Moore case is an illustration of what not to do.  Of course, the emphasis on avoiding federal estate tax was bigger at the time the planning was engaged in than it is now.  The federal estate tax exemption equivalent of the unified credit was only $1,500,000.  That’s a far cry from the current level of the exemption.  But, for those with large estates that face the potential of federal estate tax, the case clearly points out the peril that unplanned estates face in a rush to tidy matters up before time is up.

In addition, “death bed” estate planning is particularly not good when the planning tries to get too “cute.”  Formalities of entities and transfers must be followed and, when an FLP is involved, the transferor must retain sufficient assets personally to pay living expenses, etc.  Any use of the FLP assets after transfer to the FLP, must be via an agreement that clearly denotes that the assets belong to the FLP and that an appropriate amount is paid for the assets’ usage.  Retained possession and enjoyment of transferred assets is a big “no-no.” 

November 21, 2020 in Business Planning, Estate Planning | Permalink | Comments (0)

Monday, October 12, 2020

Principles of Agricultural Law

PrinciplesForBlog2020Fall-cropped

Overview

The fields of agricultural law and agricultural taxation are dynamic.  Law and tax impacts the daily life of a farmer, rancher, agribusiness and rural landowner practically on a daily basis.  Whether that is good or bad is not really the question.  The point is that it’s the reality.  Lack of familiarity with the basic fundamental and applicable rules and principles can turn out to be very costly.  As a result of these numerous intersections, and the fact that the rules applicable to those engaged in farming are often different from non-farmers, I started out just over 25 years ago to develop a textbook that addressed the major issues that a farmer or rancher and their legal and tax counsel should be aware of.  After three years, the book was complete – Principles of Agricultural Law - and it’s been updated twice annually since that time. 

The 47th edition is now complete, and it’s the topic of today’s post – Principles of Agricultural Law.

Subject Areas

The text is designed to be useful to farmers and ranchers; agribusiness professionals; ag lenders; educational professionals; lawyers, CPAs and other tax preparers; undergraduate and law students; and those that simply want to learn more about legal and tax issues.  The text covers a wide range of topics.  Here’s just a sample of what is covered:

Ag contracts.  Farmers and ranchers engage in many contractual situations, including ag leases, to purchase contracts.  The potential perils of verbal contracts are numerous and can lead to unnecessary litigation. What if a commodity is sold under forward contract and a weather event destroys the crop before it is harvested?  When does the law require a contract to be in writing?  For purchases of goods, do any warranties apply?  What remedies are available upon breach? If a lawsuit needs to be brought to enforce a contract, how soon must it be filed? Is a liability release form necessary?  Is it valid?  What happens when a contract breach occurs?  What is the remedy? 

Ag financing.  Farmers and ranchers are often quite dependent on borrowing money for keeping their operations running.  What are the rules surrounding ag finance?  This is a big issue for lenders also?  What about dealing with an ag cooperative and the issue of liens?  What are the priority rules with respect to the various types of liens that a farmer might have to deal with? 

Ag bankruptcy.  A unique set of rules can apply to farmers that file bankruptcy.  Chapter 12 bankruptcy allows farmers to de-prioritize taxes.  That can be a huge benefit.  Knowing how best to utilize those rules is very beneficial.  That’s especially true with the unsettled issue of whether Payment Protection Program (PPP) funds can be utilized by a farmer in bankruptcy.  The courts are split on that issue.

Income tax.  Tax and tax planning permeate daily life.  Deferral contracts; depreciation; installment sales; like-kind exchanges; credits; losses; income averaging; reporting government payments; etc.  The list could go on and on.  Having a basic understanding of the rules and the opportunities available can add a lot to the bottom line of the farming or ranching operation as well as help minimize the bleeding when times are tough.

Real property.  Of course, land is typically the biggest asset in terms of value for a farming and ranching operation.  But, land ownership brings with it many potential legal issues.  Where is the property line?  How is a dispute over a boundary resolved?  Who is responsible for building and maintaining a fence?  What if there is an easement over part of the farm?  Does an abandoned rail line create an issue?  What if land is bought or sold under an installment contract?  How do the like-kind exchange rules work when farmland is traded? 

Estate planning.  While the federal estate tax is not a concern for most people and the vast majority of farming and ranching operations, when it does apply it’s a major issue that requires planning.  What are the rules governing property passage at death?  Should property be gifted during life?  What happens to property passage at death if there is no will?  How can family conflicts be minimized post-death?  Does the manner in which property is owned matter?  What are the applicable tax rules?  These are all important questions.

Business planning.  One of the biggest issues for many farm and ranch families is how to properly structure the business so that it can be passed on to subsequent generations and remain viable economically.  What’s the best entity choice?  What are the options?  Of course, tax planning is a critical part of the business transition process.

Cooperatives.  Many ag producers are patrons of cooperatives.  That relationship creates unique legal and tax issues.  Of course, the tax law enacted near the end of 2017 modified an existing deduction for patrons of ag cooperatives.  Those rules are very complex.  What are the responsibilities of cooperative board members? 

Civil liabilities.  The legal issues are enormous in this category.  Nuisance law; liability to trespassers and others on the property; rules governing conduct in a multitude of situations; liability for the spread of noxious weeds; liability for an employee’s on-the-job injuries; livestock trespass; and on and on the issues go.  Agritourism is a very big thing for some farmers, but does it increase liability potential?  Nuisance issues are also important in agriculture.  It’s useful to know how the courts handle these various situations.

Criminal liabilities.  This topic is not one that is often thought of, but the implications can be monstrous.  Often, for a farmer or rancher or rural landowner, the possibility of criminal allegations can arise upon (sometimes) inadvertent violation of environmental laws.  Even protecting livestock from predators can give rise to unexpected criminal liability.  Mail fraud can also arise with respect to the participation in federal farm programs.  The areas of life potentially impacted with criminal penalties are worth knowing, as well as knowing how to avoid tripping into them.

Water law.  Of course, water is essential to agricultural production.  Water issues vary across the country, but they tend to focus around being able to have rights to water in the time of shortage and moving the diversion point of water.  Also, water quality issues are important.  In essence, knowing whether a tract of land has a water right associated with it, how to acquire a water right, and the relative strength of that water rights are critical to understand.

Environmental law.  It seems that agricultural and the environment are constantly in the news.  The Clean Water Act, Endangered Species Act and other federal (and state) laws and regulations can have a big impact on a farming or ranching operation.  Just think of the issues with the USDA’s Swampbuster rules that have arisen over the past 30-plus years.  What constitutes a regulatory taking of property that requires the payment of compensation under the Constitution?  It’s good to know where the lines are drawn and how to stay out of (expensive) trouble.

Regulatory law.  Agriculture is a very heavily regulated industry.  Animals and plants, commodities and food products are all subject to a great deal of regulation at both the federal and state level.  Antitrust laws are also important to agriculture because of the highly concentrated markets that farmers buy inputs from and sell commodities into.  Where are the lines drawn?  How can an ag operation best position itself to negotiate the myriad of rules?   

Conclusion

It is always encouraging to me to see students, farmers and ranchers, agribusiness and tax professionals get interested in the subject matter and see the relevance of material to their personal and business lives. Agricultural law and taxation is reality.  It’s not merely academic.  The Principles text is one that can be very helpful to not only those engaged in agriculture, but also for those advising agricultural producers.  It’s also a great reference tool for Extension educators. It’s also a great investment for any farmer – and it’s updated twice annually to keep the reader on top of current developments that impact agriculture.

If you are interested in obtaining a copy, perhaps even as a Christmas gift, you can visit the link here:  http://washburnlaw.edu/practicalexperience/agriculturallaw/waltr/principlesofagriculturallaw/index.html.  Instructors that adopt the text for a course are entitled to a free copy.  The book is available in print and CD versions.  Also, for instructors, a complete set of Powerpoint slides is available via separate purchase.  Sample exams and work problems are also available.  You may also contact me directly to obtain a copy.

If you are interested in obtaining a copy, you can visit the link here:  http://washburnlaw.edu/practicalexperience/agriculturallaw/waltr/principlesofagriculturallaw/index.html.  You may also contact me directly. 

October 12, 2020 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Wednesday, August 5, 2020

The Use of the LLC For the Farm or Ranch Business – Practical Application

Overview

Last week I wrote a two-part series on how the single-member LLC can be utilized as part of a farming or ranching business.  A large part of my focus was on the single-member LLC and what it means to be a disregarded entity.  In part two, I noted that the Tax Court has held that while a single-member LLC is a disregarded entity for federal income tax purposes, it is respected for federal estate and gift tax purposes.  As a result, valuation discounts can be available to decrease the taxable value of the owner’s interest in the single-member LLC.

In today’s post, guest author Marc Vianello, of Vianello Forensic Consulting, provides a practical application of the concepts that I discussed last week.  Many thanks to Marc for today’s article.

Single-Member LLCs – Valuation Implications

Assume that Broad Horizon Family Farms is a Kansas farming/ranching family comprised of a father, mother, son, and daughter.  The farm/ranch is operated as a unified business under the ownership of a four-partner general partnership.  As an unincorporated entity, this structure allows for four payment limitations for federal farm program payment purposes.  The partners of the partnership are four Kansas LLCs that each own an equal 25 percent interest in the partnership—no partner has control, and no family member is a partner. 

Also assume that father, mother, son, and daughter each own 100 percent of one of the four LLCs.  Each family member, therefore, owns a 100 percent interest in an LLC that owns a 25 percent interest in the partnership.  Assuming that the partnership agreement does not limit the partners’ LLC transfer rights, how does this play out for valuation purposes?

To answer that question, we need to know what the partnership owns; its expected future cash flows; and a valuation date.  For purposes of the example, assume that the valuation date is June 30, 2020, and that Broad Horizon Family Farms has the following assets and liabilities:

  • 2,000 acres of farm and ranch land with a real estate valuation of $8,000,000;
  • 200 cow/calf pairs with an auction value of $300,000;
  • $1,000,000 fair market value of equipment;
  • $700,000 of harvested grains and in on-farm storage priced at current commodity prices;
  • Cash on hand of $150,000.
  • Land debt of $3,050,000, with interest accruing at the annual rate of 6.75 percent We will assume that the partner LLCs and their individual owners have guaranteed the debt.

These assumptions result in the following partnership balance sheet stated at fair market value (not cost), and a capital structure that is approximately 30 percent debt and 70 percent equity without regard to built-in gains taxes, and  38.1 percent debt, 61.9 percent equity after deducting the taxes:

 

 Appraised Value

 Tax Basis

 Tax Rate

 After-Tax Value

 Cash

$   150,000

 n/a

 n/a

$   150,000

 Commodities

             700,000

                      -

40%

       420,000

 Cattle

              300,000

                      -

20%

      240,000

 Equipment

          1,000,000

                      -

40%

       600,000

 Land

    8,000,000

     1,000,000

20%

   6,600,000

 Total assets

$10,150,000

   

$8,010,000

         

 Debt (6.75% rate)

 3,050,000

   

       3,050,000

 Partnership equity

  7,100,000

 

  _4,960,000

 Total debt and equity

$10,150,000

   

 $8,010,000

On an asset basis, the Partnership equity might have an asset based “as if marketable” value of $4,960,000 as an operational whole, or $1,240,000 per LLC partner.  But that is not the fair market value of the LLC partner’s interest in the Partnership, because a hypothetical buyer would be buying into a partnership of which 75% ownership is held be family-related parties.  Accordingly, a minority discount is appropriate.  Let’s assume a 15 percent discount in this case, resulting in a minority discounted value of $1,054,000 per 25 percent Partnership interest.      

Now let’s make some assumptions regarding the annual operations of the Partnership.  For this discussion, we will make the simplifying assumption of constant results subject to inflationary growth of 1.25 percent annually:

  • Because the partnership is comprised of four equal partners, assume that there are no perquisites of control in the manner of operation and the handling of distributions. The projected operations are assumed to continue in all respects as in the past.
  • Father, mother, son, and daughter provide all of the labor, and work 50 hours weekly. The LLCs receive periodic distributions equal to 75 percent of book net income.  These payments total $554,344 annually ($138,586 to each partner LLC).  Let’s also assume that the LLC partners flow the payments directly through to their owners, that is, to father, mother, son, and daughter. 
  • Valuation requires that the fair market value of the work being performed by related parties be determined. Accordingly, we will assume that the labor provided by father, mother, son, and daughter could be replaced with a three-employee independent work force at an average hourly rate of $20, with each employee working a 50-hour week.  Note that the allocation of wages in the valuation scenario would not be equal; some higher paid person would be the manager, and the lowest paid worker may receive just minimum wage.  The independent work force payroll on a 50-hour week would be $156,000.
  • The farm/ranch generates $1,500,000 of annual gross revenues, which is $750 per acre.
  • Annual crop inputs are $300,000.
  • Annual animal care costs are $95,000
  • Annual other operating expenses are $160,000.
  • Annual interest of $205,875 (6.75 percent) is paid on the $3,050,000 of debt.
  • Net capital expenditures equal to 25% of book net income are incurred. This represents net capital costs of $184,781 annually, for which Section 179 deductions are assumed to be taken.
  • A 40 percent effective income tax rate is assumed to impute taxes to the Partnership. This is necessary to equate the Partnership’s income to that of a C corporation, because the cost of equity capital valuation metrics derive from publicly traded C corporations.
  • A 20 percent tax rate is assumed to calculate the effect of dividend tax avoidance by the flow through tax nature of the Partnership compared to the non-flow through nature of C corporations from which the cost of equity capital valuation metrics are derived.

These assumptions result in the below operating results.  The “adjusted” column is used for further valuation analysis.

 

 Operating Results

 

 Unadjusted

 Adjusted

     

 Gross revenues

$1,500,000

$1,500,000

     

 Wages

-

156,000

 Crop inputs

 300,000

300,000

 Animal care costs

95,000

95,000

 Other operating expenses

    160,000

    160,000

 Total operating expenses

    555,000

    711,000

     

 Operating profit

945,000

789,000

 Interest expense

   (205,875)

          0

 Book net income

739,125

 

 Net capital expenditures

(184,781)

(184,781)

 Distributions to the LLCs

   (554,344)

                  -

 Net cash flow from operations

$                -  

 604,219

 Imputed income taxes at 40%

 

   (241,688)

 Imputed after-tax cash flow to capital

 

$   362,531

If an 18 percent cost of equity is assumed as well as a forty percent tax deduction benefit for interest expense, the assumed 38.1 percent/61.9 percent debt/equity capital structure results in a weighted average cost of capital (“WACC”) of 12.688 percent.  The assumed growth rate of 1.25 percent therefore results in a capitalization rate of 11.438 percent.  Thus, we calculate a capitalized value of $3,169,478.  But because the partnership is a flow through entity, it is necessary to make another adjustment to equate it to the financial effects of a C corporation.  Assuming a 20 percent qualified dividend tax rate, the value of the avoided shareholder dividend taxes is $792,369.  Accordingly, the partnership equity might have cash flow based “as if marketable” value of $3,961,847 as an operational whole - $990,462 per 25 percent Partnership interest.  No discount for minority interest applies to this calculation. 

Imputed after-tax cash flow to capital

 

 $   362,531

 Assumed capitalization rate

 

11.438%

 Capitalized value

 

     3,169,478

 Adjustment for avoided shareholder dividend taxes

     792,369

 "As if marketable" value based on cash flow

 

$3,961,847

Valuation professionals must reconcile the “as if marketable” values of their different approaches.  It is often concluded that the value is not less than the amount that could be realized based on liquidation, but a 25 percent partner would not be able to compel liquidation.  Thus, the common conclusion is that the “as if marketable” value of a 25 percent partnership interest is $990,462 based on the partnership’s cash flow.  But this is not fair market value.  The valuation metrics derive from C corporations whose shares are traded in the public markets—they are liquid, while the 25% partnership interests held by the LLCs are not—they are illiquid.  Accordingly, a discount for lack of marketability (“DLOM”) must be subtracted from the “as if marketable” value to arrive at fair market value. 

Practitioners use a variety of tools to estimate DLOMs.  The most simplistic approaches use the average of various small published studies of the discounts reflected in the prices of (1) restricted stocks compared to their publicly traded versions; and (2) stocks sold before completion of an initial public offering (“IPO”) to their IPO prices.  Through 1988, these restricted studies a range of 30-35 percent.  The implied discounts trended downward thereafter with changes in SEC Rule 144.  The pre-IPO studies suggested larger discounts in the 40-45 percent range.  Larger databases of restricted stock and pre-IPO transactions now exist, and are used by many practitioners to estimate DLOM.  Nevertheless, relying on restricted stock and/or pre-IPO transactions for DLOM estimate is problematic and may be unreliable.  To support this see Vianello, Empirical Research Regarding Discounts for Lack of Marketability, Chapters 3-5 (July 2019).  Available at https://dlomcalculator.com/wp-content/uploads/2019/07/Empirical-Research-Regarding-DLOM-with-Guide.pdf.

An alternative method of estimating an appropriate DLOM uses the VFC DLOM Calculator, which couples the time and price risks associated with marketing privately held securities to various option pricing formulae.  Unlike other methodologies, the VFC DLOM Calculator is a date specific, facts and circumstances tool supported by empirical research.  The formula most appropriate for DLOM estimation is the VFC Longstaff formula.  You can find the VFC DLOM Calculator and its supporting empirical research at https://dlomcalculator.com/

Using the partnership’s characteristics (an SIC Code range of 0100 to 0299; Asking Price of $2,000,000 to $4,000,000; 4 Employees; Annual Revenues of $1,000,000 to $2,000,000), a reasonable conclusion is that the average marketing time required by an LLC partner to sell its interest in the Partnership is 232 days, with a standard deviation of 197 days.  This compares to an average of 123 days to obtain SEC approval for a public offering by a large business in the 0000 to 0999 SIC Codes.  See Vianello, Empirical Research Regarding Discounts for Lack of Marketability, Table 1.1 (July 2019).  Available at https://dlomcalculator.com/wp-content/uploads/2019/07/Empirical-Research-Regarding-DLOM-with-Guide.pdf.  The VFC DLOM Calculator informs us that we can be 95 percent confident that the average marketing period is between 226 and 239 days based on these statistics.

Using a selection of four publicly traded classified as “Agriculture Production – Crops” (SIC Code 0100) and “Agriculture Production – Livestock & Animal Specialties” (SIC Code 0200), the VFC DLOM Calculator tells us that the long-term average price volatility of the companies’ stocks is 38.1 percent, with a standard deviation of 59.0 percent.  The VFC DLOM Calculator informs us that we can be 95 percent confident that the average price volatility is between 37.3 percent and 39.0 percent using the complete set of price data.  Using this data and the above marketing period parameters, results in a risk-adjusted DLOM estimate of 22.3 percent.

But there has recently been increased price volatility in the stock market because of coronavirus uncertainty.  Looking only at the 90 trading days before June 30, 2020, the VFC DLOM Calculator tells us that the average price volatility was 70.2 percent, with a standard deviation of 76.9 percent.  The VFC DLOM Calculator informs us that we can be 95 percent confident that the average price volatility is between 62.2 percent and 78.1 percent using the more current set of price data.  Using this data and the above marketing period parameters, results in a risk-adjusted DLOM estimate of 40.3 percent.  The VFC DLOM Calculator informs us that we can be 95 percent certain that the appropriate DLOM based on the more current price data is between 35.0 percent and 45.7 percent. The economic circumstances prevailing as of June 30, 2020, counsel to this higher DLOM estimate.

Using a 40.3 percent DLOM, we might conclude that the fair market value of a 25 percent interest in the partnership held by the partner LLC is $591,306 ($990,462 x (1-.403))

 However, the family members don’t own interests in the partnership.  They instead own 100 percent interests in their respective LLCs.  What is the fair market value of these LLCs?  It’s something less than $591,306, because the LLC, too, is subject to a lack of marketability.  Additional professional consideration must be given to developing the appropriate DLOM.  For example, it may be a discount more associated with financial portfolio risks than with agriculture risks.

Conclusion

This use of the single-member LLC can be a valuable aspect of an intergenerational transfer of the farming or ranching business.  Coupled with a general partnership farming entity, the single-member LLC can also optimize receipt of federal farm program payment limitations.  Further structuring of the management form of the LLC can also bring additional income and self-employment tax savings. 

August 5, 2020 in Business Planning | Permalink | Comments (0)

Friday, July 31, 2020

Estate and Business Planning for the Farm and Ranch Family – Use of the LLC (Part Two)

Overview

In Part One earlier this week, I focused on the use of a single-member limited liability company (LLC) as part of the estate/business/succession plan for the farming and ranching operation.  As noted in Part One, a single-member LLC is often used to hold general partner interests in the farming general partnership so that federal farm program payments can be maximized and achieve liability protection.  Also, noted in Part One was that a single-member LLC can be a “disregarded entity.”  That means that the entity is disregarded as an entity separate from its owner if the owner does not have limited liability.

For a single-member LLC that is a disregarded entity, what does the single-member of the LLC own?  Is it the interest in the LLC or the underlying asset(s) of the LLC?  If the entity is respected as an entity separate from its owner, can valuation discounts for the owner’s interest in the entity be achieved for federal estate and gift tax purposes?  If so, that’s a big planning (and tax saving) opportunity.

How a single-member LLC as a disregarded entity is treated for federal estate and tax purposes – it’s the topic of today’s post.

Valuation Concepts – In General

The answer to the question of what an owner of a single-member LLC owns makes a difference as far as the valuation of the interest owned is concerned because of the possible effect of valuation discounts.  Those discounts are for lack of control and minority interest.  With a single-member LLC, there is no discount for lack of control – the single-owner has full control.  But, as a privately held business, a discount for lack of marketability might be available if the LLC is respected as an entity. 

The value of an asset for federal gift and estate tax purposes is “fair market value.”  That’s defined as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell, and both having reasonable knowledge of relevant facts.” Treas. Reg. §§20.2031-1(b); 25.2512-1; Rev. Rul. 59-60, 1959-1 C.B. 237.  State law controls the determination of what has been transferred in the valuation process. 

Under the “check-the-box” regulations, a business entity that is not classified as a corporation is a “domestic eligible entity” and, without an election, is “[d]isregarded as an entity separate from its owner if it has a single owner.”  Treas. Reg. §301.7701-3(b)(1)(ii).  Under Treas. Reg. §301.7701-1(a) and 301.7701-2(c)(2), an entity with a single member is disregarded as an entity separate from its owner “for federal tax purposes.”  That definition raises two questions: 1) What does “for federal tax purposes” mean?  Does it mean federal income as well as federal transfer (estate and gift) taxes?; and 2) does it bar the use of the “willing buyer/willing seller” valuation rule?   In 2004, the IRS shed some light on the first  question when it ruled that although a disregarded entity is not recognized for federal income tax purposes, the entity exists under state law and state law controls the owner’s rights and economic interests.  Rev. Rul. 2004-88, 2004-2 C.B. 165.  In 2009, the full Tax Court answered both questions and defined the interest owned by a single-member LLC owner.

The Pierre Case

In Pierre v. Comr., 133 T.C. 24 (2009), the petitioner received a $10 million gift in 2000.  Later that year, she created a single-member LLC in accordance with New York law and transferred cash and marketable securities to it worth about $4.25 million.  She held 100% ownership of the LLC and did not file an election with Form 8823 to be treated as an association taxable as a corporation.  Thus, the LLC was a disregarded entity.  Twelve days after funding the LLC, the petitioner transferred her entire interest in the LLC to trusts established for the benefit of her son and granddaughter.  She accomplished that by gifting a 9.5 percent interest in the LLC to each trust and then by selling a 40.5 percent interest in the LLC to each trust in exchange for promissory notes with a face amount of slightly over $1 million each.  In valuing the transfers for gift tax purposes, her valuation expert applied a 30 percent discount to the value of the LLC’s underlying assets (which turned out to be 36.5% for gift tax purposes due to an error in valuing the underlying assets).  The petitioner filed a federal gift tax return (Form 709) reporting the taxable value of the gift to each trust in accordance with the valuation expert’s report.  The IRS issued a notice of deficiency on the basis that the gifts should have been treated as gifts of proportionate shares of the LLC’s assets rather than transfers of interests in the LLC.  As such, as 100% owner of the LLC’s assets, no discount was appropriate.  The IRS took the position that the entity was the check-the-box regulations meant that the LLC was to be disregarded as an entity separate from the petitioner – they were one in the same. 

The petitioner claimed that NY state property law governed for transfer tax purposes rather than federal tax law.  Under NY law, the LLC was not to be disregarded.  Rather, upon the LLC’s formation, NY law created an interest in the LLC that was distinguishable from the petitioner.  The LLC became the petitioner’s personal property that held legal title to the assets that the entity contained.  Indeed, the NY LLC statute stated that, “A member has no interest in the specific property of the limited liability company.”  N.Y. Limited Liability Company Law Section 601

The full Tax Court, in a 10-6 decision, agreed with the petitioner and determined that “for federal tax purposes” was limited to federal income tax and that the petitioner owned an interest in the LLC rather than the underlying assets of the LLC.  As such, the willing buyer/willing seller valuation test applied to valuing the transferred interests which could then carry out any applicable valuation discounts.  The Tax Court pointed out that “state law defines and federal tax law determines the tax treatment of property rights and interests.”  See also Morgan v. Comr., 309 U.S. 78 (1940); United States v. National Bank of Commerce, 472 U.S. 713 (1985); Knight v. Comr., 115 T.C. 506 (2000).  The Tax Court also concluded that the check-the-box regulations don’t define property interests.  Instead, they merely allow the election of specific tax treatment for federal tax purposes, and that the Congress did not specifically disallow valuation discounts in the context of single-member LLCs – they aren’t listed in I.R.C. §§2701-2704 along with other transactions that can’t claim valuation discounts.  Thus, the petitioner’s gift tax liability was to be determined by the value of the transferred LLC interests rather than by a hypothetical transfer of the underlying assets of the LLC. 

In a second Tax Court opinion in the case, the Tax Court noted that the petitioner made the gifts and sales on the same day.  Pierre v. Comr., T.C. Memo. 2010-106.  Thus, the court treated them as a single part-gift/part-sale transaction.  That had the effect of reducing the lack of control discount slightly (from a claimed 35 percent to 30 percent) because the combined 50% gift/sale to each transferee could block the appointment of a new manager under the LLC operating agreement.  The petitioner also couldn’t come up with any non-tax reasons for separating the transfers into gifts and sales. 

Conclusion

The Pierre case is important because, as full Tax Court opinion, it provides strong support for the proposition that the asset to be valued for transfer tax purposes is the LLC interest and not the property that the LLC holds.  Planning and valuation opportunities are possible based on that notion.  A single-member LLC holding a farmer’s general partnership interest in a farming operation can be structured to obtain valuation discounts when the interest is gifted to a member of the subsequent generation as well as at death.  That makes the cost of intergenerational transfers of farming interests less which will be even more important if the federal estate and gift tax exemption level declines from its present level.

In a post next week, the concepts discussed in this two-part series will be applied to a family farm operation engaged in an intergenerational transfer.

July 31, 2020 in Business Planning | Permalink | Comments (1)

Monday, July 27, 2020

Estate and Business Planning for the Farm and Ranch Family – Use of the LLC (Part 1)

Overview

In the family business planning context for a farm and ranch, the key to success is for the senior generation to clearly express goals.  Doing so assists the planning team in using entities and associated tax planning techniques to satisfy those goals.  For business transition/succession purposes, the use of the limited liability company (LLC) is one entity structure that can work in the right situation and with the right set of facts. 

Often, in agriculture, the entity that conducts the farming operations is established as a general partnership with each partner having his own single-member LLC.  This is done in order to optimize (under most farm programs) the receipt of payment limitations.  The general partnership doesn’t limit liability, but it also doesn’t limit at the entity level the number of “person” determinations for payment limitation purposes.  Limited liability for each partner is achieved via the use of the single-member LLC to hold the partnership interest.

A single-member LLC can also be a “disregarded” entity?  What does that mean?  Is the entity simply disregarded for tax purposes, or is the entity respected in ways that make a big difference from a tax and estate planning perspective?  How does it all fit together for a farming operation? 

Utilizing an LLC as part of farm/ranch business succession – it’s the topic of today’s post – Part One of a two-part series.

Business/Succession Planning Goals

I have worked with farm families on estate and business succession plans for almost 30 years.  Each situation is unique.  There is no “one size fits all.”  However, I can make an observation concerning what are typical goals of the farm or ranch family, at least from the senior generation’s perspective.  The senior generation typically wants to retain control of the operation for as long as possible.  But, along with that goal of retaining control is often the desire to transfer equity ownership in the operational entity to other family members.  Any transfer is often required to be with restrictions that bar transfer outside the family.  Limited liability is commonly desired, as is flexibility in any entity form to deal with changes in the family structure and the tax landscape.  Also, it is a common desire to minimize taxation both upon entity formation and throughout the future; maximize government payments; and create the potential for valuation discounts – both for gifted interests and for the interests retained by the parents at death.

An LLC – What is it?

An LLC is an S corporation with fewer eligibility requirements and more flexibility with regards to the capital structure.  When an LLC is taxed as a partnership, it can be more advantageous than an S corporation – debt can be included in member basis; there is more flexibility given to multiple classes of interest; and distributions are more tax advantageous.  As compared to a limited partnership, LLC members can participate in management without losing the feature of limited liability.  Thus, an LLC basically blends the advantages of both the corporate and partnership form of business.  It has the advantage of a flow-through entity with the structure of a corporation.  An LLC’s management can either be conducted by all of the members acting together or by managers that the members select.  The members can choose the management structure desired, and multiple classes of ownership are allowed.  If the LLC is classified as a partnership or sole proprietorship for tax purposes, the entity is not taxed on business income.  All items of income, loss, deduction and credit are passed through to the member(s) and taxed at the member’s individual ratesI.R.C. 704(a). 

What Does It Mean To Be a “Disregarded” Entity?

While it takes at least one member for an LLC to be formed there is no limitation on the number of members – unlike an S corporation which is limited to 100 shareholders.  I.R.C. §1361(b)(1)(A). Under what are known as the “check-the-box” regulations,” an LLC with only one member can elect to be treated for tax purposes an association taxable as a corporation or as an entity disregarded as an entity separate from its owner.  Regs. Secs. 301.7701-1, et seq.  If no election is made on Form 8832, the default rule is that the entity is disregarded as an entity separate from its owner if the owner does not have limited liability. 

A single-member LLC is a separate entity from its owner, except when it comes to taxes.  That is a distinguishing feature from a sole proprietorship, and it protects the owner from debts and liabilities of the business.  But, both a single-member LLC and a sole proprietorship file a Schedule F (or C for non-farm businesses) to report business income and deductions.  The amounts on the Schedule are then included with the owner’s individual income tax return. 

That raises a question – for tax purposes, what does the single-member of the LLC own?  Is it an interest in the LLC or the underlying asset(s) of the LLC?  Why might that matter?

Guaranteeing debt.  Insight into precisely what a single-member LLC owner owns can be gleaned from IRS guidance on the handling of debt in a single-member LLC.  Under the “at-risk” rules of I.R.C. §465, a loss from an activity to which the rules apply are disallowed unless the taxpayer is “at risk” with respect to the activity.  A taxpayer is “at risk” with respect to an activity to the extent that the taxpayer contributes money or basis or borrows funds that are contributed to the activity, but only to the extent that the taxpayer is personally liable for repayment or to the extent of the value of collateral pledged to secure the borrowed funds.  I.R.C. §§465(b)(1)-(2).  But, what if the member of a single-member LLC that is a disregarded entity guarantees the debt?  Does that count as being “at risk” in the entity’s activity?  The Code doesn’t address the issue. The answer to that question turns on what the single member actually owns. 

In CCA 201308028 (Nov. 14, 2012), the taxpayer was the sole owner of an LLC that was treated as a disregarded entity.  The LLC owned a second LLC that was also treated as a disregarded entity.  The second LLC borrowed funds for use in its business activity.  The taxpayer, the first LLC and two S corporations that the taxpayer wholly owned guaranteed the debt.  The taxpayer also provided the lender with a commercial guarantee for the full loan amount.  The taxpayer unconditionally guaranteed the full prepayment of the loan but did not waive subrogation or reimbursement rights against the second LLC or the right of contribution from the first LLC and the two S corporations.  The IRS, following the approach of the Second, Eighth and Eleventh Circuits, determined that the taxpayer would be ultimately liable as the payor of last resort and not protected against loss and, therefore, would be “at risk” if the taxpayer did not have a right of contribution from the other co-guarantors. See  Waters v. Commissioner, 978 F.2d 1310 (2d Cir. 1992), cert. denied, 507 U.S. 1018 (1993); Young v. Commissioner, 926 F.2d 1083 (11th Cir. 1991); Moser v. Commissioner, 914 F.2d 1040 (8th Cir. 1990).  It’s an “economic realities” test.  That rationale applies when a taxpayer guarantees debt of an LLC that is taxed either as a partnership or as a disregarded entity. 

The IRS followed up the CCA with A.M. 2014-3 (Aug. 27, 2013) where the IRS concluded that an LLC member that guarantees the LLC’s debt is at risk for purposes of I.R.C. §465 in the situation where the LLC is treated as a partnership or a disregarded entity.  The IRS said that a member’s guarantee of qualified non-recourse (debt whose satisfaction may be obtained on default only out of the particular collateral given and not out of the debtor's other assets) financing of an LLC increased the member’s amount at risk to the extent of the guarantee. 

With this IRS guidance in mind, transactions involving debt guarantees have more certainty.  That means that planners can structure deals in accordance with the economics of the particular situation and lender requirements. The guidance also supports the notion that a member of an LLC that is treated as a disregarded entity owns an interest in the entity rather than the underlying assets in the entity.  The entity is respected for tax purposes. 

Employment tax.  A disregarded entity is treated as a corporation for employment tax purposes.  Treas. Reg. §301.7701-2(c)(2).  Thus, the entity is responsible for paying employment taxes and any excise taxes that apply.  Consequently, a single-member LLC must have an EIN and a bank account in its name.  Self-employment tax also applies.  If a partnership owns a disregarded entity, the partners are treated as self-employed.  They are not employees of the disregarded entity.  REG-114307-15, 81 F.R. 26763 (May 4, 2016), 2016 I.R.B. 1006. 

Identification of the entity.  The IRS can require the owner of a disregarded entity to report the entity’s employer identification number (EIN) on the taxpayer’s individual return.  I.R.C. §§6011(b); 6109(b); PMTA 2016-08.  The basic requirement is that there must be sufficient information on the return so that the taxpayer is properly identified.  Because an individual taxpayer that is a member of a single-member LLC has both a social security number and an EIN, listing both numbers on the taxpayer’s return could help the IRS to cross-reference the numbers and associate correct information and returns with the taxpayer.  Including both numbers does not invalidate the return and could avoid confusion on the IRS part. 

Conclusion

In Part Two, I will explore how a single-member LLC as a disregarded entity is treated for federal estate and gift tax purposes.  If a single-member LLC is a respected entity separate from its owner, perhaps valuation discounts for entity interests can apply.  Again, the outcome of the issue turns on what the owner of the single-member LLC actually owns. 

July 27, 2020 in Business Planning | Permalink | Comments (0)

Saturday, July 25, 2020

Recent Court Developments of Interest

Overview

The court decisions of relevance to agricultural producers, rural landowners and agribusinesses keep on coming.  There never seems to be a slack time.  Today’s article focuses on some key issues involving bankruptcy, business valuation, and insurance coverage for loss of a dairy herd due to stray voltage.  More ag law court developments – that’s the topic of today’s post.

 

Court Determines Interest Rate in Chapter 12 Case

In re Key Farms, Inc., No. 19-02949-WLH12, 2020 Bankr. LEXIS 1642 (Bankr. D. Wash. Jun. 23, 2020)

 The bankrupt debtor in this case is a family farming operation engaged in apple, cherry, alfalfa, seed corn and other crop production. The parents of the family own 100 percent of the debtor. In 2014, the debtor changed its primary lender which extended a line of credit to the debtor that the father personally guaranteed and a term loan to the debtor that the father also personally guaranteed. The lender held a first-priority security interest in various real and personal property to secure loan repayment. The debtor became unable to repay the line of credit and the default caused defaults on the term loan and the guarantees. The lender sued to foreclose on its collateral and have a receiver appointed.

The debtor filed Chapter 12 bankruptcy and proposed a reorganization plan where it would continue farming during 2020-2024 in accordance with proposed budgets. The plan provided for repayment of all creditors in full, and repayment of the lender over 20 years at a 4.5 percent interest rate (prime rate of 3.25 percent plus 1.25 percent). The lender opposed plan confirmation.

In determining whether the reorganization plan was fair and equitable to the lender based on the facts, the bankruptcy court noted the father’s lengthy experience in farming and familiarity with the business and that the farm manager was experienced and professional. The court also noted that parents had extensive experience with crop insurance and that they were committing unencumbered personal assets to the plan.  In addition, the court took note of the debtor’s recent shift to more profitable crops and a demonstrated ability to manage around cash flow difficulties, and that the lender would be “meaningfully oversecured.” The court also determined that the debtor’s farming budgets appeared to be based on reasonable assumptions and forecasted consistent annual profitability. However, the court did note that the debtor had a multi-year history of operating losses in recent years; was heavily reliant on crop insurance; was engaged in an inherently risky business subject to forces beyond the debtor’s control; had no permanent long-term leases in place for the considerable amount of acreage that it leased; could not anticipate how the Chinese Virus would impact the business into the future; and proposed a lengthy post-confirmation obligation to the lender.

Accordingly, the court made an upward adjustment to the debtor’s prosed additional 1.25 percent to the prime rate by increasing it by at least 1.75 percent. The court scheduled a conference with the parties to discuss how to proceed.

 

Valuation Discount Applies to Non-Voting Interests

Grieve v. Comr., T.C. Memo. 2020-28

The petitioner was the Chairman and CEO of a company. After his wife’s death, he established two limited liability companies, with a management company controlled by his daughter as the general partner in each entity holding a 0.2 percent controlling voting manger interest and a 99.8 percent nonvoting interest in each entity held by a family trust – a grantor retained annuity trust (GRAT). The petitioner gifted the 99.8 percent interest in the two entities and filed Form 709 to report the gifts. The IRS revised the reported value of the gifts and asserted a gift tax deficiency of about $4.4 million based on a theoretical game theory construct.

According to the IRS, a hypothetical seller of the 99.8 percent nonvoting interests in the two LLCs would not sell the interests at a large discount to the net asset value (NAV), but would seek to enter into a transaction to acquire the 0.2 percent controlling voting interest from the current owner of that interest in order to obtain 100 percent ownership and eliminate the loss in value as a result of lack of control and lack of marketability. In support of this, the IRS assumed that the owner of the 99.8 percent nonvoting interest would have to pay the controlling 0.2 percent voting member a premium above their undiscounted NAV. Under traditional methodology, the IRS expert estimated that a 28 percent discount to the NAV was appropriate for the 99.8 percent nonvoting units. But, instead of accepting that level of discount, the IRS proposed that the owner of the nonvoting units would pay a portion of the dollar amount of the discount from NAV to buy the remaining 0.2 percent voting interest.

The petitioner’s expert used a standard valuation methodology to prepare valuation appraisal reports. This expert applied a lack of control discount of 13.4 percent for the gift to the GRAT and a 12.7 percent lack of control discount for the gift to the irrevocable trust. The valuation firm also applied a 25 percent discount for both gifts.

The Tax Court determined that the IRS failed to provide enough evidence for its valuation estimates. The Tax Court also rejected the IRS assumption of the impact of future events on valuation, noting that the IRS valuation expert reports lacked details on how the discounts were calculated. Thus, the Tax Court rejected the proposed valuation estimates of the IRS and accepted those of the petitioner. The result was a 35 percent discount (total) for entity-level lack of control and lack of marketability compared to a 1.4 percent discount had the IRS approach been accepted.

 

S Corporation Value Accounts for Tax on Shareholders

Kress v. United States., 327 F. Supp. 2d 731 (E.D. Wisc. 2019)

The taxpayers, a married couple, gifted minority interests of stock in their family-owned S corporation to their children and grandchildren in 2007-2009. The taxpayers paid gift tax on the transfers of about $2.4 million. The taxpayers’ appraiser valued the S corporation earnings as of the end of 2006, 2007 and 2008 as a fully tax-affected C corporation. On audit, the IRS also followed a tax-effected approach to valuation of the S corporation earnings but applied an S corporation premium (pass-through benefit) and asserted that the gifts were undervalued as a result. The IRS assessed an additional $2.2 million of federal gift tax. The taxpayers paid the additional tax and sued for a refund in 2016.

The issue was the proper valuation of the S corporation. Historically, the IRS has not allowed for tax-affected S corporation valuation based on Gross v. Comr., T.C. Memo. 1999-254; Wall v. Comr., T.C. Memo. 2001-75; Estate of Heck v. Comr., T.C. Memo. 2002-34; Estate of Adams v. Comr., T.C. Memo. 2002-80; Dallas v. Comr., T.C. Memo. 2006-212; and Estate of Gallagher v. Comr, T.C. Memo. 2011-148. The IRS also has an internal valuation guide that provides that “…no entity level tax should be applied in determining the cash flows of an electing S corporation. …the personal income taxes paid by the holder of an interest in an electing S corporation are not relevant in determining the fair market value of that interest.”

But other courts have allowed the tax impact on shareholders. See, e.g., Delaware Open MRI Radiology Associates, 898 A.2d 290 (Del. Ct. Chanc. 2006); Bernier v. Bernier, 82 Mass. App. Ct. 81 (2012).

The court accepted the tax-affect valuation but disallowed the S corporation premium that IRS asserted. The court also allowed a discount for lack of marketability between 25 percent and 27 percent depending on the year of the transfer at issue.

 

Stray Voltage Could Lead to Partial Insurance Coverage

Hastings Mutual Insurance Co. v. Mengel Dairy Farms, Inc., No. 5:19CV1728, 2020 U.S. Dist. LEXIS 87612 (N.D. Ohio May 19, 2020)

 The defendant unexpectedly had several cows and calves die and also suffered a loss of milk production and profits. The defendant filed a claimed against the plaintiff for insurance coverage for death of livestock, cost of investigation and repairs, and loss of business profits. The plaintiff investigated the claim, utilizing an electrical company to do so. The electrical company found a stray electrical current present on the property. The plaintiff then hired a fire and explosion company to investigate the property. This investigation resulted in a finding of no stray voltage on the property, but the company did express its belief that stray voltage did cause the defendant’s harm. As a result, the plaintiff paid the insurance claim for death of livestock and repairs, but not for loss of business profits.

The plaintiff then filed an action for a determination under the policy of whether loss of business profits was a covered loss. The plaintiff sought a declaratory judgment specifying that coverage for loss and damage resulting from the stray voltage was not triggered because the defendant was not subject to a “necessary suspension” of farming operations, and that the defendant’s loss or damage had to be directly caused by a “peril insured against” rather than being caused by dehydration which resulted from the cattle’s reaction to the stray voltage. The defendant filed a counterclaim for breach of contract; breach of good faith and fair dealing; and unjust enrichment. The plaintiff moved for summary judgment on the basis that the policy wasn’t triggered for lack of electrocution and that there was no suspension in the defendant’s business operations. The court determined that the policy did not define the term electrocution in the context of dairy animals. As such, the court concluded that the term could be reasonably interpreted to mean death by electrical shock or the cause of irreparable harm. As an ambiguous term, it was defined against the plaintiff and in the defendant’s favor. The court also refused to grant summary judgment on the cause of death issue. In addition, because the defendant did not cease operations, the court concluded that the policy provided no coverage for lost profits. The court also rejected the defendant’s breach of contract claim due to lack of suspending the business and rejected the good faith/fair dealing claim because mere negligence was not enough to support such a claim. The unjust enrichment claim was likewise denied.

Conclusion

The cases discussed above are all quite relevant to agricultural producers.  For those struggling financially that find themselves in a Chapter 12, the interest rate utilized in the case is of primary importance.  Many factors go into determining the rate, and farming operations can achieve a lower rate by meeting certain factors listed by the court in the decision mentioned above.  Likewise, the valuation issue is critical, particularly if the federal estate tax exemption amount were to drop.  When federal (and, possibly, state) estate tax is involved, valuation is the “game.”  Finally, in all insurance cases, the language of the policy is critical to determine coverage application.  Any ambiguous terms will be construed against the company.  In all situations, having good legal counsel is a must.

July 25, 2020 in Bankruptcy, Business Planning, Insurance | Permalink | Comments (0)