Saturday, May 1, 2021
The Agricultural Law and Tax Report
May 1, 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)
Monday, April 19, 2021
Ag Law and Taxation - 2016 Bibliography
Overview
Today's post is a bibliography of my ag law and tax blog articles of 2016. Earlier this year I have provided bibliographies for you of my blog articles for 2020, 2019, 2018 and 2017. This now completes the bibliographies since I began the blog in July of 2016. At the end of 2021, I will post a lengthy blog article of all of the articles published through that timeframe.
The 2016 bibliography of articles – it’s the subject matter of today’s post.
BUSINESS PLANNING
Treasury Attacks Estate and Entity Planning Techniques With Proposed Valuation Regulations
Using an LLC to Reduce S.E Tax and the NIIT
IRS Audit Issue – S Corporation Reasonable Compensation
Rents Are Passive, But They Can Be Recharacterized - And Grouped (Sometimes)
Tribute To Orville Bloethe
https://lawprofessors.typepad.com/agriculturallaw/2016/12/tribute-to-orville-bloethe.html
CIVIL LIABILITIES
Registration of a Pesticide Doesn't Mean It Might Not Be Misbranded
Death of Livestock In Blizzard Was a Covered Loss by “Drowning”
FIFRA Pre-Emption of Pesticide Damage Claims
Agritourism Acts, Zoning Issues and Landowner Liability
The “Agriculture” Exemption From The Requirement To Pay Overtime Wages
The Scope and Effect of Equine Liability Acts
What’s a Rural Landowner’s Responsibility Concerning Crops, Trees and Vegetation Near an Intersection?
CONTRACTS
Some Thoughts on Production Contracts
https://lawprofessors.typepad.com/agriculturallaw/2016/10/some-thoughts-on-production-contracts.html
CRIMINAL LIABILITIES
Prison Sentences Upheld For Egg Company Executives Even Though Government Conceded They Had No Knowledge of Salmonella Contamination.
ENVIRONMENTAL LAW
Registration of a Pesticide Doesn't Mean It Might Not Be Misbranded
FIFRA Pre-Emption of Pesticide Damage Claims
Air Emissions, CWA and CERCLA
https://lawprofessors.typepad.com/agriculturallaw/2016/08/air-emissions-cwa-and-cercla.html
Are Seeds Coated With Insecticides Exempt From FIFRA Regulation?
ESTATE PLANNING
The Situs of a Trust Can Make a Tax Difference
Treasury Attacks Estate and Entity Planning Techniques With Proposed Valuation Regulations
Common Estate Planning Mistakes of Farmers
Staying on the Farm With the Help of In-Home Care
Including Property in the Gross Estate to Get a Basis Step-Up
Farm Valuation Issues
https://lawprofessors.typepad.com/agriculturallaw/2016/10/farm-valuation-issues.html
The Future of the Federal Estate Tax and Implications for Estate Planning
Tribute To Orville Bloethe
https://lawprofessors.typepad.com/agriculturallaw/2016/12/tribute-to-orville-bloethe.html
INCOME TAX
House Ways and Means Committee Has A Blueprint For Tax Proposals - Implications For Agriculture
In Attempt To Deny Oil and Gas-Related Deductions, IRS Reads Language Into the Code That Isn’t There – Tax Court Not Biting
IRS Does Double-Back Layout on Self-Employment Tax
S.E. Tax on Passive Investment Income; Election Out of Subchapter K Doesn’t Change Entity’s Nature; and IRS Can Change Its Mind
Handling Depreciation on Asset Trades
https://lawprofessors.typepad.com/agriculturallaw/2016/08/handling-depreciation-on-asset-trades.html
Claiming “Bonus” Depreciation on Plants
https://lawprofessors.typepad.com/agriculturallaw/2016/08/claiming-bonus-depreciation-on-plants.html
Proper Reporting of Crop Insurance Proceeds
Permanent Conservation Easement Donation Opportunities and Perils
Sales By Farmers/Rural Landowners Generate Common Questions
Expense Method Depreciation - Great Tax Planning Opportunities On Amended Returns
The DPAD and Agriculture
https://lawprofessors.typepad.com/agriculturallaw/2016/10/the-dpad-and-agriculture.html
Donating Food Inventory to a Qualified Charity - New Opportunity for Farmers
Farm Valuation Issues
https://lawprofessors.typepad.com/agriculturallaw/2016/10/farm-valuation-issues.html
Treatment of Farming Casualty and Theft Losses
More on Handling Farm Losses
https://lawprofessors.typepad.com/agriculturallaw/2016/11/more-on-handling-farm-losses.html
Selected Tax Issues For Rural Landowners Associated With Easement Payments
Are You A Farmer? It Depends!
https://lawprofessors.typepad.com/agriculturallaw/2016/11/are-you-a-farmer-it-depends.html
Rents Are Passive, But They Can Be Recharacterized - And Grouped (Sometimes)
It’s Fall and Time to “Hoop it Up”!
https://lawprofessors.typepad.com/agriculturallaw/2016/11/its-fall-and-time-to-hoop-it-up.html
Utilizing the Home Sale Exclusion When Selling the Farm
Farmland Acquisition – Allocation of Value to Depreciable Items
Tribute To Orville Bloethe
https://lawprofessors.typepad.com/agriculturallaw/2016/12/tribute-to-orville-bloethe.html
IRS Continues (Unsuccessfully) Attack on Cash Accounting By Farmers
The Uniform Capitalization Rules and Agriculture
The Non-Corporate Lessor Rule – A Potential Trap In Expense Method Depreciation
REAL PROPERTY
Texas Mineral Estates, Groundwater Rights, Surface Usage and the “Accommodation Doctrine”
So You Want To Buy Farmland? Things to Consider
What’s the Character of the Gain From the Sale of Farm or Ranch Land?
Utilizing the Home Sale Exclusion When Selling the Farm
REGULATORY LAW
New Food Safety Rules Soon to Apply to Farmers and Others In the Food Production Chain
New Regulations on Marketing of Livestock and Poultry
The Future of Ag Policy Under Trump
https://lawprofessors.typepad.com/agriculturallaw/2016/11/the-future-of-ag-policy-under-trump.html
Verifying Employment – New Form I-9; The Requirements and Potential Problem Areas
SECURED TRANSACTIONS
Feedlot Has Superior Rights to Cattle Sale Proceeds
WATER LAW
Watercourses and Boundary Lines
https://lawprofessors.typepad.com/agriculturallaw/2016/11/watercourses-and-boundary-lines.html
April 19, 2021 in Business Planning, Civil Liabilities, Contracts, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)
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
Top Ten Agricultural Law and Tax Developments of 2016 (Ten Through Six)
Top Ten Agricultural Law Developments of 2016 (Five Through One)
Farm Financial Stress – Debt Restructuring
Qualified Farm Indebtedness – A Special Rule for Income Exclusion of Forgiven Debt
What Are a Farmer’s Rights When a Grain Elevator Fails?
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
Tough Financial Times in Agriculture and Lending Clauses – Peril for the Unwary
What Interest Rate Applies to a Secured Creditor’s Claim in a Reorganization Bankruptcy?
PACA Trust Does Not Prevent Chapter 11 DIP’s Use of Cash Collateral
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!
BUSINESS PLANNING
The Most Important Agricultural Law and Tax Developments of 2016
Top Ten Agricultural Law and Tax Developments of 2016 (Ten Through Six)
Top Ten Agricultural Law Developments of 2016 (Five Through One)
C Corporation Penalty Taxes – Time to Dust-Off and Review?
Divisive Reorganizations of Farming and Ranching Corporations
The Scope and Effect of the “Small Partnership Exception”
Using the Right Kind of an Entity to Reduce Self-Employment Tax
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
Minority Shareholder Oppression Case Raises Several Tax Questions
Farm Program Payment Limitations and Entity Planning – Part One
Farm Program Payment Limitations and Entity Planning – Part Two
Summer Ag Tax/Estate and Business Planning Conference
An Installment Sale as Part of an Estate Plan
The Use of a Buy-Sell Agreement for Transitioning a Business
The Business of Agriculture – Upcoming CLE Symposium
Forming a Farming/Ranching Corporation Tax-Free
Farmers Renting Equipment – Does it Trigger A Self-Employment Tax Liability?
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?
IRS To Finalize Regulations on Tax Status of LLC and LLP Members?
H.R. 1 – Farmers, Self-Employment Tax and Business Arrangement Structures
Summer 2018 – Farm Tax and Farm Business Education
Partnerships and Tax Law – Details Matter
CIVIL LIABILITIES
The Most Important Agricultural Law and Tax Developments of 2016
Top Ten Agricultural Law and Tax Developments of 2016 (Ten Through Six)
Top Ten Agricultural Law and Developments of 2016 (Five Through One)
Recreational Use Statutes – What is Covered?
Is Aesthetic Damage Enough to Make Out a Nuisance Claim?
Liability Associated with a Range of Fires and Controlled Burns
What’s My Liability for Spread of Animal Disease
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
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
Top Ten Agricultural Law and Tax Developments of 2016 (Ten Through Six)
Top Ten Agricultural Law Developments of 2016 (Five Through One)
Another Issue With Producing Livestock on Contract – Insurance
The Ability of Tenants-in-Common To Bind Co-Tenants to a Farm Lease – and Related Issues
Ag Goods Sold at Auction – When is a Contract Formed?
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
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?
COOPERATIVES
The Most Important Agricultural Law and Tax Developments of 2016
Top Ten Agricultural Law Developments of 2016 (Five Through One)
What Is a Cooperative Director’s Liability to Member-Shareholders and Others?
CRIMINAL LIABILITIES
The Necessity Defense to Criminal Liability
The Business of Agriculture – Upcoming CLE Symposium
What Problems Does The Migratory Bird Treaty Act Pose For Farmers, Ranchers and Rural Landowners?
ENVIRONMENTAL LAW
Drainage Activities on Farmland and the USDA
The Application of the Endangered Species Act to Activities on Private Land
Eminent Domain – The Government’s Power to “Take” Private Property
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?
The Prior Converted Cropland Exception From Clean Water Act Jurisdiction
Air Emission Reporting Requirement For Livestock Operations
ESTATE PLANNING
Rights of Refusal and the Rule Against Perpetuities
Some Thoughts On Long-Term Care Insurance
Overview of Gifting Rules and Strategies
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?
Discounting IRAs for Income Tax Liability?
Special Use Valuation and Cash Leasing
Self-Employment Tax On Farming Activity Of Trusts
Would an Interest Charge Domestic International Sales Corporation Benefit a Farming Business?
An Installment Sale as Part of An Estate Plan
Using An IDGT For Wealth Transfer and Business Succession
Federal Tax Claims in Decedent’s Estates – What’s the Liability and Priority?
Estate Tax Portability – The Authority of the IRS To Audit
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?
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”
Using Schedule J As A Planning Tool For Clients With Farm Income
Deductibility of Soil and Water Conservation Expenses
Should Purchased Livestock Be Depreciated or Inventoried?
The Changing Structure of Agricultural Production and…the IRS
Farm-Related Casualty Losses and Involuntary Conversions – Helpful Tax Rules in Times of Distress
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?
Tax Treatment of Commodity Futures and Options
Discounting IRAs for Income Tax Liability?
Like-Kind Exchanges, Reverse Exchanges, and the Safe Harbor
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
Minority Shareholder Oppression Case Raises Several Tax Questions
Input Costs – When Can a Deduction Be Claimed?
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
Tax Treatment of Cooperative Value-Added Payments
Would an Interest Charge Domestic International Sales Corporation Benefit a Farming Business?
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
Using An IDGT For Wealth Transfer and Business Succession
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?
Substantiating Charitable Contributions
Forming a Farming/Ranching Corporation Tax-Free
Farmers Renting Equipment – Does It Trigger A Self-Employment Tax Liability?
Commodity Credit Corporation Loans and Elections
New Partnership Audit Rules
https://lawprofessors.typepad.com/agriculturallaw/2017/09/new-partnership-audit-rules.html
Alternatives to Like-Kind Exchanges of Farmland
South Dakota Attempts To Change Internet Sales Taxation – What Might Be The Impact On Small Businesses?
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?
Tax Treatment of Settlements and Court Judgments
The “Perpetuity” Requirement For Donated Easements
The Tax Rules Involving Prepaid Farm Expenses
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?
The Deductibility (Or Non-Deductibility) of Interest
H.R. 1 - Farmers, Self-Employment Tax and Business Arrangement Structures
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
Partnerships and Tax Law – Details Matter
Senate Clears Tax Bill - On To Conference
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
Another Tax Bill Introduced, Year-End Planning, and Jan. 10 Seminar/Webinar
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
The Ability of Tenants-in-Common To Bind Co-Tenants to a Farm Lease – and Related Issues
Like-Kind Exchanges, Reverse Exchanges, and the Safe Harbor
Like-Kind Exchange Issues
https://lawprofessors.typepad.com/agriculturallaw/2017/06/like-kind-exchange-issues.html
Easements on Agricultural Land – Classification and Legal Issues
Should I Enter Into An Oil and Gas Lease?
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?
Farmers, Ranchers and Government Administrative Agencies
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
What is a “Separate Person” For Payment Limitation Purposes?
Livestock Indemnity Payments – What They Are and Tax Reporting Options
Can One State Regulate Agricultural Production Activities in Other States?
Farm Program Payment Limitations and Entity Planning – Part One
Farm Program Payment Limitations and Entity Planning – Part Two
Eminent Domain – The Government’s Power to “Take” Private Property
Department of Labor Overtime Rules Struck Down – What’s the Impact on Ag?
The Prior Converted Cropland Exception From Clean Water Act Jurisdiction
Air Emission Reporting Requirement For Livestock Operations
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
SECURED TRANSACTIONS
Ag Supply Dealer Liens – Important Tool in Tough Financial Times
“Commercial Reasonableness” of Collateral Sales
What Are A Farmer’s Rights When a Grain Elevator Fails?
Selling Collateralized Ag Products – The “Farm Products” Rule
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
Summer 2018 - Farm Tax and Farm Business Education
The Business of Agriculture – Upcoming CLE Symposium
Summer Ag Tax/Estate and Business Planning Conference
WATER LAW
Prior Appropriation – First in Time, First in Right
Kansas Water Law - Reactions to and Potential Consequences of the Garetson decision
Public Access To Private Land Via Water
Big Development for Water in the West - Federal Implied Reserved Water Rights Doctrine Applies to Groundwater
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)
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)
Chapter 12 Bankruptcy – Feasibility of the Reorganization Plan
Farm Bankruptcy and the Preferential Payment Rule
Can a Bankrupt Farm Debtor Make Plan Payments Directly to Creditors?
Agricultural Law Online!
https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html
Chapter 12 Bankruptcy and the Tools-of-the-Trade Exemption
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
BUSINESS PLANNING
The “Almost Top Ten” Agricultural Law and Tax Developments of 2017
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
Form a C Corporation – The New Vogue in Business Structure?
Tax Issues When Forming a C Corporation
End of Tax Preparation Season Means Tax Seminar Season is About to Begin
Converting a C Corporation to an S Corporation – The Problem of Passive Income
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
Buy-Sell Agreements for Family Businesses
When is an Informal Business Arrangement a Partnership?
Management Activities and the Passive Loss Rules
Expense Method Depreciation and Trusts
Qualified Business Income Deduction – Proposed Regulations
Intentionally Defective Grantor Trust – What is it and How Does it Work?
When Can a Corporate Shareholder be Held Liable for Corporate Debts and Liabilities?
Farm Wealth Transfer and Business Succession – The GRAT
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
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?
The “Almost Top Ten” Ag Law and Tax Developments of 2018
CIVIL LIABILITIES
The “Almost Top Ten” Agricultural Law and Tax Developments of 2017
Landlord Liability for Injuries Occurring on Leased Premises
When Does a Rule of Strict Liability Apply on the Farm?
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?
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!
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”?
Liability for Injuries Associated with Horses
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
CONTRACTS
Is a Farmer a Merchant? Why it Might Matter
Some Thoughts on the Importance of Leasing Farmland
Contract Rescission – When Can You Back Out of a Deal?
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
COOPERATIVES
The Qualified Business Income (QBI) Deduction – What a Mess!
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
CRIMINAL LIABILITIES
Curtilage – How Much Ag Property is Protected from a Warrantless Search?
Establishing the Elements of a Cruelty to Animals Charge
What Difference Does it Make if I Post My Property “No Trespassing”?
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
ENVIRONMENTAL LAW
The “Almost Top Ten” Agricultural Law and Tax Developments of 2017
Top Ten Agricultural Law and Tax Developments of 2017 (Five through One)
Is a CWA Permit Needed for Pollution Discharges via Groundwater?
Non-Tax Ag Provisions and the Omnibus Bill
Wetlands and Farm Programs – Does NRCS Understand the Rules?
Regulation of Wetlands and “Ipse Dixit” Determinations
WOTUS Developments
https://lawprofessors.typepad.com/agriculturallaw/2018/08/wotus-developments.html
Does the Migratory Bird Treaty Act Apply to Farmers?
Agricultural Law Online!
https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html
Is Groundwater a “Point Source” Pollutant?
“Waters of the United States” Means “Frozen Soil”?
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?
The “Almost Top Ten” Ag Law and Tax Developments of 2018
ESTATE PLANNING
The “Almost Top Ten” Agricultural Law and Tax Developments of 2017
The Tax Cuts and Job Acts – How Does it Impact Estate Planning?
What’s the Charitable Deduction for Donations From a Trust?
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
Some Thoughts on the Importance of Leasing Farmland
End of Tax Preparation Season Means Tax Seminar Season is About to Begin
Modifying an Irrevocable Trust – Decanting
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
Impact of Post-Death Events on Valuation
Beneficiary Designations, Changed Circumstances and the Contracts Clause
Qualified Business Income Deduction – Proposed Regulations
Spousal Joint Tendencies and Income Tax Basis
Farm and Ranch Estate Planning in 2018 and Forward
The TCJA, Charitable Giving and a Donor-Advised Fund
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?
The “Almost Top Ten” Ag Law and Tax Developments of 2018
INCOME TAX
The “Almost Top Ten” Agricultural Law and Tax Developments of 2017
Top Ten Agricultural Law and Tax Developments of 2017 (Five through One)
The Qualified Business Income (QBI) Deduction – What a Mess!
The Tax Cuts and Jobs Act – How Does it Impact Estate Planning?
What’s the Charitable Deduction for Donations from a Trust?
Can Farmers Currently Deduct Research Expenditures?
Innovation on the Farm – Will the Research and Development Credit Apply?
What Happens When the IRS Deems an Ag Activity to Be a Hobby?
The Spousal Qualified Joint Venture – Implications for Self-Employment Tax and Federal Farm Program Payment Limitations
Livestock Sold or Destroyed Because of Disease
Form a C Corporation – The New Vogue in Business Structure?
Deductible Repairs Versus Capitalization
The Tax Treatment of Farming Net Operating Losses
Congress Modifies the Qualified Business Income Deduction
IRS Collections – The Basics
https://lawprofessors.typepad.com/agriculturallaw/2018/03/irs-collections-the-basics-.html
Tax Issues Associated with Oil and Gas Production
Refundable Fuel Credits – Following the Rules Matters
Distinguishing Between a Capital Lease and an Operating Lease
End of Tax Preparation Season Means Tax Seminar Season is About to Begin
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
Gifts of Ag Commodities to Children and the New Tax Law
Post-Death Sale of Crops and Livestock
Is There a Downside Risk to E-Filing Your Taxes?
Purchase and Sale Allocations to CRP Contracts
Converting a C Corporation to an S Corporation – The Problem of Passive Income
The Impact of the TCJA on Estates and Trusts
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
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
Charitable Giving Post-2017
https://lawprofessors.typepad.com/agriculturallaw/2018/07/charitable-giving-post-2017.html
When is an Informal Business Arrangement a Partnership?
Management Activities and the Passive Loss Rules
Tax Issues on Repossession of Farmland
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
Expense Method Depreciation and Trusts
Qualified Business Income Deduction – Proposed Regulations
The Qualified Business Income Deduction and “W-2 Wages”
Tax Consequences on Partition and Sale of Land
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
The TCJA, Charitable Giving and a Donor-Advised Fund
Agricultural Law Online!
https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html
What is Depreciable Farm Real Property?
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?
Non-Depreciable Items on the Farm or Ranch
What are the Tax Consequences on Sale or Exchange of a Partnership Interest?
Expense Method Depreciation and Structures on the Farm
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?
The “Almost Top Ten” Ag Law and Tax Developments of 2018
INSURANCE
Beneficiary Designations, Changed Circumstances and the Contracts Clause
Recent Developments Involving Crop Insurance
Agricultural Law Online!
https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html
Farm Liability Policies – Are All Activities on the Farm Covered?
The “Almost Top Ten” Ag Law and Tax Developments of 2018
REAL PROPERTY
In-Kind Partition and Adverse Possession – Two Important Concepts in Agriculture
Some Thoughts on the Importance of Leasing Farmland
Prescriptive Easements and Adverse Possession – Obtaining Title to Land Without Paying for It
Purchase and Sale Allocations to CRP Contracts
Tax Issues on Repossession of Farmland
The Accommodation Doctrine – Working Out Uses Between Surfaces and Subsurface Owners
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?
The “Almost Top Ten” Ag Law and Tax Developments of 2018
REGULATORY LAW
The “Almost Top Ten” Agricultural Law and Tax Developments of 2017
Top Ten Agricultural Law and Tax Developments of 2017 (Ten through Six)
Is There a Constitutional Way to Protect Animal Ag Facilities?
Trade Issues and Tariffs – Are Agriculture’s Concerns Legitimate?
Federal Crop Insurance – Some Recent Case Developments
Non-Tax Ag Provisions in the Omnibus Bill
Are Mandatory Assessments for Generic Advertising of Ag Commodities Constitutional?
Wind Farm Nuisance Matter Resolved – Buy the Homeowners Out!
Regulation of Wetlands and “Ipse Dixit” Determinations
Ag Employment – Verifying the Legal Status of Employees
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”?
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
SECURED TRANSACTIONS
Ag Finance – Getting the Debtor’s Name Correct on the Financing Statements
What Are “Proceeds” of Crops and Livestock?
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
SEMINARS AND CONFERENCES
Agricultural Law and Economics Conference
Summer Farm Income Tax/Estate and Business Planning Conference
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)
Top Ten Agricultural Law and Tax Developments of 2017 (Five through One)
The Accommodation Doctrine – Working on Uses Between Surface and Subsurface Owners
Agricultural Law Online!
https://lawprofessors.typepad.com/agriculturallaw/2018/10/agricultural-law-online.html
Drainage Issues – Rules for Handling Excess Surface Water
The “Almost Top Ten” Ag Law and Tax Developments of 2018
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)
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
More Recent Developments in Agricultural Law
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
Ag in the Courtroom
https://lawprofessors.typepad.com/agriculturallaw/2019/07/ag-in-the-courtroom.html
Key Farm Bankruptcy Modification on the Horizon?
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
BUSINESS PLANNING
Can a State Tax a Trust with No Contact with the State?
Real Estate Professionals and Aggregation – The Passive Loss Rules
More Recent Developments in Agricultural Law
Self-Rentals and the Passive Loss Rules
What’s the Best Entity Structure for the Farm or Ranch Business?
Where Does Life Insurance Fit in an Estate Plan for a Farmer or Rancher?
Recent Developments in Farm and Ranch Business Planning
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?
Tax Consequences of Forgiving Installment Payment Debt
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
The Family Limited Partnership – Part One
The Family Limited Partnership – Part Two
Does the Sale of Farmland Trigger Net Investment Income Tax?
Some Thoughts on Ag Estate/Business/Succession Planning
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?
Selected Recent Cases Involving Agricultural Law
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?
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
Coming-To-The-Nuisance By Staying Put – Or, When 200 Equals 8,000
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?
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
Developments in Agricultural Law and Taxation
Ag Contracts – What if Goods Don’t Conform to the Contract?
ENVIRONMENTAL LAW
Top 10 Developments in Ag Law and Tax for 2018 – Numbers 10 and 9
Top 10 Developments in Ag Law and Tax for 2018 – Numbers 8 and 7
Top Ten Agricultural Law and Tax Developments of 2018 – Numbers 6, 5, and 4
Top Ten Agricultural Law and Tax Developments of 2018 – Numbers 3, 2, and 1
Big EPA Developments – WOTUS and Advisory Committees
Does Soil Erosion Pose a Constitutional Issue?
Public Trust vs. Private Rights – Where’s the Line?
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”
Regulatory Changes to the Endangered Species Act
Irrigation Return Flows and the Clean Water Act
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?
Groundwater Discharges of Pollutants and the Supreme Court
The “Almost Top Ten” Ag Law and Ag Tax Developments of 2019
ESTATE PLANNING
Tax Filing Season Update and Summer Seminar!
Time to Review Estate Planning Documents?
Can a State Tax a Trust with No Contact with the State?
Estate Planning in Second Marriage Situations
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
Can the IRS Collect Unpaid Estate Tax From the Beneficiaries?
Sale of the Personal Residence After Death
More Recent Developments in Agricultural Law
Thrills with Wills – When is a Will “Unduly Influenced”?
Heirs Liable for Unpaid Federal Estate Tax 28 Years After Death
What’s the Best Entity Structure for the Farm or Ranch Business?
Where Does Life Insurance Fit in an Estate Plan for a Farmer or Rancher?
Recent Developments in Farm and Ranch Business Planning
Wayfair Does Not Mean That a State Can Always Tax a Trust Beneficiary
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
The Importance of Income Tax Basis “Step-Up” at Death
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?
Year-End Legislation Contains Tax Extenders, Repealers, and Modifications to Retirement Provisions
INCOME TAX
Top 10 Developments in Ag Law and Tax for 2018 – Numbers 10 and 9
Top Ten Agricultural Law and Tax Developments of 2018 – Numbers 6, 5, and 4
Top Ten Agricultural Law and Tax Developments of 2018 – Numbers 3, 2, and 1
Tax Filing Season Update and Summer Seminar!
QBID Final Regulations on Aggregation and Rents – The Meaning for Farm and Ranch Businesses
The QBID Final Regulations – The “Rest of the Story”
Can a State Tax a Trust with No Contact with the State?
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
Valuing Non-Cash Charitable Gifts
https://lawprofessors.typepad.com/agriculturallaw/2019/03/valuing-non-cash-charitable-gifts.html
Passive Losses and Material Participation
Passive Losses and Real Estate Professionals
Developments in Agricultural Law and Taxation
Real Estate Professionals and Aggregation – The Passive Loss Rules
Sale of the Personal Residence After Death
Cost Segregation Study – Do You Need One for Your Farm?
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
Self-Rentals and the Passive Loss Rules
More on Self-Rentals
https://lawprofessors.typepad.com/agriculturallaw/2019/04/more-on-self-rentals.html
Of Black-Holes, Tax Refunds, and Statutory Construction
What Happened in Tax During Tax Season?
Cost Segregation and the Recapture Issue
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
Ag Cooperatives and the QBID – Initial Guidance
Wayfair Does Not Mean That a State Can Always Tax a Trust Beneficiary
Start Me Up! – Tax Treatment of Start-Up Expenses
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
Tax Treatment of Settlements and Court Judgments
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
Tax-Deferred Exchanges and Conservation Easements
Proper Handling of Breeding Fees
https://lawprofessors.typepad.com/agriculturallaw/2019/08/proper-handling-of-breeding-fees.html
Proper Tax Reporting of Commodity Wages
Tax Consequences of Forgiving Installment Payment Debt
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
Shareholder Loans and S Corporation Stock Basis
The Family Limited Partnership – Part Two
Hobby Losses Post-2017 and Pre-2026 – The Importance of Establishing a Profit Motive
The Importance of Income Tax Basis “Step-Up” at Death
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
Does the Sale of Farmland Trigger Net Investment Income Tax?
Are Director Fees Subject to Self-Employment Tax?
Are Windbreaks Depreciable?
https://lawprofessors.typepad.com/agriculturallaw/2019/11/are-windbreaks-depreciable.html
Tax Issues Associated with Restructuring Credit Lines
Is a Tenancy-in-Common Interest Eligible for Like-Kind Exchange Treatment?
Year-End Legislation Contains Tax Extenders, Repealers, and Modifications to Retirement Provisions
The “Almost Top Ten” Ag Law and Ag Tax Developments of 2019
INSURANCE
Prevented Planting Payments – Potential Legal Issues?
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
Selected Recent Cases Involving Agricultural Law
The Accommodation Doctrine – More Court Action
Defects in Real Estate Deeds – Will Time Cure All?
Is there a Common-Law Right to Hunt (and Fish) Your Own Land?
Legal Issues Associated with Abandoned Railways
Public Trust vs. Private Rights – Where’s the Line?
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?
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?
“Slip Slidin’ Away” – The Right of Lateral and Subjacent Support
Is a Tenancy-in-Common Interest Eligible for Like-Kind Exchange Treatment?
REGULATORY LAW
Top 10 Developments in Ag Law and Tax for 2018 – Numbers 10 and 9
Top Ten Agricultural Law and Tax Developments of 2018 – Numbers 6, 5, and 4
Top Ten Agricultural Law and Tax Developments of 2018 – Numbers 3, 2, and 1
Is There a Common-Law Right to Hunt (and Fish) Your Own Land?
Packers and Stockyards Act – Basic Provisions
Packers and Stockyards Act Provisions for Unpaid Cash Sellers of Livestock
More Recent Developments in Agricultural Law
Ag Antitrust – Is There a Crack in the Wall of the “Mighty-Mighty” (Illinois) Brick House?
Can Foreign Persons/Entities Own U.S. Agricultural Land?
Prevented Planting Payments – Potential Legal Issues?
Eminent Domain and Agriculture
https://lawprofessors.typepad.com/agriculturallaw/2019/06/eminent-domain-and-agriculture.html
Classification of Seasonal Ag Workers – Why It Matters
Administrative Agency Deference – Little Help for Ag From the Supreme Court
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
Court Decision Illustrates USDA’s Swampbuster “Incompetence”
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
SECURED TRANSACTIONS
Market Facilitation Program Pledged as Collateral – What are the Rights of a Lender?
SEMINARS AND CONFERENCES
Summer 2019 Farm and Ranch Tax and Estate/Business Planning Seminar
2019 National Ag Tax/Estate and Business Planning Conference in Steamboat Springs!
Summer Tax and Estate Planning Seminar!
2020 National Summer Ag Income Tax/Estate and Business Planning Seminar
Fall Seminars
https://lawprofessors.typepad.com/agriculturallaw/2019/08/fall-seminars.html
WATER LAW
The Accommodation Doctrine – More Court Action
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?
The Politics of Prior Appropriation – Is a Senior Right Really Senior?
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)
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
Unique, But Important Tax Issues – “Claim of Right;” Passive Loss Grouping; and Bankruptcy Taxation
Disaster/Emergency Legislation – Summary of Provisions Related to Loan Relief; Small Business and Bankruptcy
Retirement-Related Provisions of the CARES Act
Farm Bankruptcy – “Stripping, “Claw-Black,” and the Tax Collecting Authorities
SBA Says Farmers in Chapter 12 Ineligible for PPP Loans
The “Cramdown” Interest Rate in Chapter 12 Bankruptcy
Bankruptcy and the Preferential Payment Rule
BUSINESS PLANNING
Partnership Tax Ponderings – Flow-Through and Basis
Farm and Ranch Estate and Business Planning in 2020 (Through 2025)
Transitioning the Farm or Ranch – Stock Redemption
Estate and Business Planning for the Farm and Ranch Family – Use of the LLC (Part 1)
Estate and Business Planning for the Farm and Ranch Family – Use of the LLC (Part 2)
The Use of the LLC for the Farm or Ranch Business – Practical Application
CIVIL LIABILITIES
Top Ten Agricultural Law and Tax Developments from 2019 (Numbers 10 and 9)
Ag Law in the Courts – Feedlots; Dicamba Drift; and Inadvertent Disinheritance
Ag Law and Tax in the Courts – Bankruptcy Debt Discharge; Aerial Application of Chemicals; Start-Up Expenses and Lying as Protected Speech
Dicamba, Peaches and a Defective Ferrari; What’s the Connection?
Liability for Injuries Associated with Horses (and Other Farm Animals)
Issues with Noxious (and Other) Weeds and Seeds
Of Nuisance, Overtime and Firearms – Potpourri of Ag Law Developments
CONTRACTS
The Statute of Frauds and Sales of Goods
Disrupted Economic Activity and Force Majeure – Avoiding Contractual Obligations in Time of Pandemic
Is it a Farm Lease or Not? – And Why it Might Matter
COOPERATIVES
Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 2 and 1)
Concentrated Ag Markets – Possible Producer Response?
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)
Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 6 and 5)
Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 4 and 3)
Clean Water Act – Compliance Orders and “Normal Farming Activities”
Groundwater Discharges of “Pollutants” and “Functional Equivalency”
NRCS Highly Erodible Land and Wetlands Conservation Final Rule – Clearer Guidance for Farmers or Erosion of Property Rights? – Part One
NRCS Highly Erodible Land and Wetlands Conservation Final Rule – Clearer Guidance for Farmers or Erosion of Property Rights? – Part Two
NRCS Highly Erodible Land and Wetlands Conservation Final Rule – Clearer Guidance for Farmers or Erosion of Property Rights? – Part Three
The Prior Converted Cropland Exception – More Troubles Ahead?
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
ESTATE PLANNING
Ag Law in the Courts – Feedlots; Dicamba Drift; and Inadvertent Disinheritance
Recent Developments Involving Estates and Trusts
What is a “Trade or Business” For Purposes of Installment Payment of Federal Estate Tax?
Alternate Valuation – Useful Estate Tax Valuation Provision
Farm and Ranch Estate and Business Planning in 2020 (Through 2025)
Retirement-Related Provisions of the CARES Act
Are Advances to Children Loans or Gifts?
Tax Issues Associated with Options in Wills and Trusts
Valuing Farm Chattels and Marketing Rights of Farmers
Is it a Gift or Not a Gift? That is the Question
Does a Discretionary Trust Remove Fiduciary Duties a Trustee Owes Beneficiaries?
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
When is Transferred Property Pulled Back into the Estate at Death? Be on Your Bongard!
‘Tis the Season for Giving, But When is a Transfer a Gift?
INCOME TAX
Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 2 and 1)
Does the Penalty Relief for a “Small Partnership” Still Apply?
Substantiation – The Key to Tax Deductions
Ag Law and Tax in the Courts – Bankruptcy Debt Discharge; Aerial Application of Chemicals; Start-Up Expenses and Lying as Protected Speech
Unique, But Important Tax Issues – “Claim of Right;” Passive Loss Grouping; and Bankruptcy Taxation
Conservation Easements and the Perpetuity Requirement
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?
Tax Treatment of Meals and Entertainment
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
Retirement-Related Provisions of the CARES Act
Income Tax-Related Provisions of Emergency Relief Legislation
The Paycheck Protection Program – Still in Need of Clarity
Solar “Farms” and The Associated Tax Credit
Obtaining Deferral for Non-Deferred Aspects of an I.R.C. §1031 Exchange
Conservation Easements – The Perpetuity Requirement and Extinguishment
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?
More Developments Concerning Conservation Easements
Imputation – When Can an Agent’s Activity Count?
Exotic Game Activities and the Tax Code
Demolishing Farm Buildings and Structures – Any Tax Benefit?
Tax Incentives for Exported Ag Products
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
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?
Farmland Lease Income – Proper Tax Reporting
Merging a Revocable Trust at Death with an Estate – Tax Consequences
The Use of Deferred Payment Contracts – Specifics Matter
Is Real Estate Held in Trust Eligible for I.R.C. §1031 Exchange Treatment?
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
Abandoned Railways and Issues for Adjacent Landowners
Obtaining Deferral for Non-Deferred Aspects of an I.R.C. §1031 Exchange
Are Dinosaur Fossils Minerals?
https://lawprofessors.typepad.com/agriculturallaw/2020/06/are-dinosaur-fossils-minerals.html
Real Estate Concepts Involved in Recent Cases
Is it a Farm Lease or Not? – And Why it Might Matter
REGULATORY LAW
Top Ten Agricultural Law and Tax Developments from 2019 (Numbers 10 and 9)
Top Ten Agricultural Law and Tax Developments from 2019 (Number 8 and 7)
Ag Law and Tax in the Courts – Bankruptcy Debt Discharge; Aerial Application of Chemicals; Start-Up Expenses and Lying as Protected Speech
Hemp Production – Regulation and Economics
DOJ to Investigate Meatpackers – What’s it All About?
Dicamba Registrations Cancelled – Or Are They?
What Does a County Commissioner (Supervisor) Need to Know?
The Supreme Court’s DACA Opinion and the Impact on Agriculture
Right-to-Farm Law Headed to the SCOTUS?
The Public Trust Doctrine – A Camel’s Nose Under Agriculture’s Tent?
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?
Of Nuisance, Overtime and Firearms – Potpourri of Ag Law Developments
What Farm Records and Information Are Protected from a FOIA Request?
Can One State Dictate Agricultural Practices in Other States?
SECURED TRANSACTIONS
Family Farming Arrangements and Liens; And, What’s a Name Worth?
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
SEMINARS AND CONFERENCES
Summer 2020 Farm Income Tax/Estate and Business Planning Conference
Registration Open for Summer Ag Income Tax/Estate and Business Planning Seminar
Summer 2020 – National Farm Income Tax/Estate and Business Planning Conference
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
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
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
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
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)
Friday, January 1, 2021
The “Almost Top Ten” Ag Law and Ag Tax Developments of 2020
Overview
It’s the time of year again where I sift through the legal and tax developments impacting U.S. agriculture from the past year, and rank them in terms of their importance to farmers, ranchers, agribusinesses, rural landowners and the ag sector in general.
As usual, 2020 contained many legal and tax developments of importance to the agricultural sector. Of course, there were major tax law changes that occurred as a result of the federal government’s response to various state governors shutting down businesses in their states and locking down their economies with resulting economic harm. The other issues continued their natural ebb and flow in reaction to the economics governing the sector and policy and regulatory implementations.
It’s also difficult to pair things down to ten significant developments. There are other developments that are also significant, but perhaps less so on a national scale. So, today’s post is the first installment in a series devoted to those developments that were left on the cutting table and didn’t quite make the “Top Ten” for 2020.
The “almost top ten of 2020” (in no particular order) – that’s the topic of today’s post.
Withheld Tax Not Deprioritized in Bankruptcy
In In re DeVries, 621 B.R. 445 (8th Cir. B.A.P. 2020), rev’g., No. 19-0018, 2020 U.S. Bankr. LEXIS 1154 (Bankr. N.D. Iowa Apr. 28, 2020)
A major aspect of Chapter 12 bankruptcy is the ability to deprioritize governmental claims (e.g., taxes). But, does the provision cover withheld taxes? Is so, Chapter 12 is even more valuable to farm debtors.
In this case, the debtors filed Chapter 12 and sold a significant amount of farmland and farming machinery in 2017, triggering almost $1 million of capital gain income and increasing their 2017 tax liability significantly. The tax liability was offset to a degree by income tax withholding from the wife’s off-farm job. Their amended Chapter 12 plan called for a refund to the estate of withheld federal and state income taxes. The taxing authorities objected, claiming that the withheld amounts had already been applied against the debtor’s tax debt as 11 U.S.C. §553(a) allowed. The debtors claimed that 2017 legislation barred tax debt arising from the sale of assets used in farming from being offset against previously collected tax. Instead, the debtors argued, the withheld taxes should be returned to the bankruptcy estate. If withheld taxes weren’t returned to the bankruptcy estate, the debtors argued, similarly situated debtors would be treated differently.
The bankruptcy court was faced with the issue of whether 11 U.S.C. §1232(a) entitled the bankruptcy estate to a refund of the withheld tax. Largely based on legislative history, the trial court concluded that 11 U.S.C. §1232(a) overrode a creditor’s set-off rights under 11 U.S.C. §553(a) in the context of Chapter 12. The debtors’ bankruptcy estate was entitled to a refund of the withheld income taxes.
On appeal, the bankruptcy appellate panel for the Eighth Circuit reversed. The appellate panel determined that 11 U.S.C. §1232(a) is a priority-stripping provision and not a tax provision and only addresses the priority of a claim and does not establish any right to or amount of a refund. As such, nothing in the statue authorized a debtor’s Chapter 12 plan to require a taxing authority to disgorge, refund or turn-over pre-petition withholdings for the benefit of the bankruptcy estate. The statutory term “claim,” The court reasoned, cannot be read to include withheld tax as of the petition date. Accordingly, the statute was clear and legislative history purporting to support the debtor’s position was rejected.
Bankruptcy and the Preferential Payment Rule – The Dean Foods Matter
A decade ago, the preferential payment rule arose in the context of the VeraSun bankruptcy. In late 2020, the issue back in relation to bankruptcy filing of Dean Foods, the largest dairy subsidiary company in the United States. Dean Foods and its forty-three affiliates filed Chapter 11 bankruptcy on November 12, 2019 in the United States Bankruptcy Court for the Southern District of Texas, which is being jointly administered under case no. 19-36313. In the fall of 2020, Dean Foods and its affiliates filed a joint Chapter 11 plan of liquidation. Dairy farmers that sold milk to Dean Farms shortly before the bankruptcy filing then started receiving letters demanding repayment of the amount paid for those milks sales.
The preferential payment rule does come with some exceptions. The exceptions basically comport with usual business operations. In other words, if the transaction between the debtor and the creditor occurred in the normal course of the parties doing business with each other, then the trustee’s “avoidance” claim will likely fail.
Exchange for new value. The bankruptcy trustee cannot avoid a transfer to the extent the transfer was intended by the debtor and the creditor (to or for whose benefit such transfer was made) to be a contemporaneous exchange for new value given to the debtor, and occurred in a substantially contemporaneous exchange. 11 U.S.C. §547(c)(1)(A-B). A contemporaneous exchange for new value is not preferential because it encourages the creditor to deal with troubled debtors and because other creditors are not adversely affected if the debtor’s estate receives new value. See, e.g., In re Jones Truck Lines, 130 F.3d 323 (8th Cir. 1997). “New value” as used in Section 547(c) means “money or money’s worth in goods, services, or new credit.” 11 U.S.C. § 547(a)(2). An exchange for new value is presumed substantially contemporaneous if the transfer of estate property is made within seven days of the transfer of the new value. See, e.g., In re Mason, 189 B.R. 932 (Bankr. N.D. Iowa 1995).
Ordinary course of business. The bankruptcy trustee also cannot avoid a transfer to the extent that the transfer was in payment of a debt that the debtor incurred in the ordinary course of the debtor’s business (or financial affairs) with the creditor, and the transfer was made in the ordinary course of business or financial affairs of the debtor and the creditor; or was made according to ordinary business terms. 11 U.S.C. §547(c)(2)(A)-(B). If the transaction at is the first between the parties, “the transaction must be typical compared to both parties’ past dealings with similarly-situated parties. In re Pickens, No. 06-01120, 2008 Bankr. LEXIS 6 (Bankr. N.D. Iowa Jan. 3, 2008).
The vast majority of dairy farmers receiving the demand letters should be able to demonstrate that the milk sales were in the ordinary course of business. But, just knowing the exceptions to the rule is vitally important.
Appellate Court Upholds $750,000 Compensatory Damage Award in Hog Nuisance Suit
McKiver v. Murphy-Brown, LLC, 980 F.3d 937 (4th Cir. 2020)
Here, the plaintiffs were pre-existing neighbors to the defendant’s large-scale confinement hog feeding facility conducted by a third-party farming operation via contract. The facility annually maintained nearly 15,000 of the defendant’s hogs that generated about 153,000 pounds of feces and urine every day. The waste was disposed of via lagoons and by spreading it over open “sprayfields” on the farm. The plaintiffs sued in state court in 2013 for nuisance violations, but later dismissed that action and refiled in federal court after learning of the defendant’s control over the hog feeding facility naming the defendant as the sole defendant.
The federal trial court coordinated 26 related cases against similar hog production operations brought by nearly 500 plaintiffs into a master case docket and proceeded with trials in 2017. In this case, the jury awarded $75,000 in compensatory damages to each of 10 plaintiffs and $5 million in punitive damages to each plaintiff. The punitive damage award was later reduced to $2.5 million per plaintiff after applying a state law cap on punitive damages.
On appeal, the appellate court determined that the trial court had properly allowed the plaintiffs’ expert testimony to establish the presence of fecal material on the plaintiffs’ homes and had properly limited the expert witness testimony of the defendant concerning odor monitoring she conducted at the hog facility. The appellate court also rejected the defendant’s claim that the third party farming operation should be included in the case as a necessary and indispensable party. The appellate court also affirmed the trial court’s holding concerning the availability of compensatory damages beyond the rental value of the property and the jury instruction on nuisance. The appellate court also concluded that the trial court properly submitted the question of punitive damages to the jury. The appellate court reversed the trial court’s admission of financial information of the defendant’s corporate grandfather and combining the punitive damages portion of the trial with the liability portion, but held that such errors did not require a new trial. However, the appellate court remanded the case for a consideration of the proper award of punitive damages without consideration of the grandparent’s company’s financial information (such as compensation amounts to corporate executives).
It’s also important to note that while North Carolina law was involved in this case, as a result of this litigation several states, including Nebraska and Oklahoma, have recently amended their state right-to-farm laws with the intent of strengthening the protections afforded farming operations.
Shortly after the appellate court reached its decision, the defendant's parent company (China-based WH Group Ltd and its U.S.-based pork producer Smithfield Foods, Inc.) announced that it settled the nuisance suits brought by hundreds of plaintiffs. Smithfield Foods, Inc. said that the settlement, "takes into account the divided decision of the court."
Lifetime Ban on Owning Firearms For Filing Tax Returns With False Statement
Folajtar v. The Attorney General of the United States, 980 F.3d 897(3rd Cir. 2020)
Any law that impairs a fundamental constitutional right (any of the first ten amendments to the Constitution) is subject to strict scrutiny – or at least it’s supposed to be. The right to bear arms, as the Second Amendment, is a fundamental constitutional right. Thus, any law restricting that right is to be strictly scrutinized. But, does a convicted felon always permanently lose the right to own a firearm. What if the felony is a non-violent one? These questions were at issue in this case.
The plaintiff pleaded guilty in 2011 to willfully making a materially false statement on her federal tax returns. She was sentenced to three-years’ probation, including three months of home confinement, a $10,000 fine, and a $100 assessment. She also paid back taxes exceeding $250,000, penalties and interest. Her conviction triggered 18 U.S.C. §922(g)(1), which prohibits those convicted of a crime punishable by more than one year in prison from possessing firearms. The plaintiff’s crime was punishable by up to three years’ imprisonment and a fine of up to $100,000.
As originally enacted in 1938, 18 U.S.C. §922(g)(1) denied gun ownership to those convicted of violent crimes (e.g., murder, kidnapping, burglary, etc.). However, the statute was expanded in the 1968. Later, the U.S. Supreme Court recognized gun ownership as an individual constitutional right in 2008. District of Columbia v. Heller, 554 U.S. 570 (2008). In a split decision, the majority reasoned that any felony is a “serious” crime and, as such, results in a blanket exclusion from Second Amendment protections for life. The majority disregarded the fact that the offense was non-violent, was the plaintiff’s first-ever felony offense, and was an offense for which she received no prison sentence. The majority claimed it had to rule this way because of deference to Congressional will that, the majority claimed, created a blanket, categorical rule.
The dissent rejected the majority’s categorical rule, pointing out that the plaintiff’s offense was nonviolent, and no evidence of the plaintiff’s dangerousness was presented. The dissent also noted that the majority’s “extreme deference” gave legislatures the power to manipulate the Second Amendment by simply choosing a label. Instead, the dissent reasoned, when the fundamental right to bear arms is involved, narrow tailoring to public safety is required. Because the plaintiff posed no danger to anyone, the dissent’s position was that her Second Amendment rights should not be curtailed. Likewise, because gun ownership is an individual constitutional right, the dissent pointed out that the Congress bears a high burden before extinguishing it. Post-2008, making a categorical declaration is insufficient to satisfy that burden, according to the dissent.
Expect this case to be headed to the U.S. Supreme Court.
Conclusion
That’s the first part of the trip through the “almost Top 10” of 2020. I will continue the trek through the list next time.
January 1, 2021 in Bankruptcy, Civil Liabilities, Criminal Liabilities | Permalink | Comments (0)
Thursday, November 26, 2020
Of Nuisance, Overtime and Firearms – Potpourri of Ag Law Developments
Overview
As readers of this blog know, periodically I write an article focusing on recent court developments. This is one of those articles. Recently, federal and state courts have issued some rather significant opinions involving livestock odors, overtime wages for dairy workers and the Second Amendment right to bear arms.
A potpourri of ag law and related issues – it’s the topic of today’s post.
Appellate Court Upholds $750,000 Compensatory Damage Award in Hog Nuisance Suit
McKiver v. Murphy-Brown, LLC, No. 19-1019, 2020 U.S. App. LEXIS 36416 (4th Cir. Nov. 19, 2020)
A nuisance is an invasion of an individual's interest in the use and enjoyment of land rather than an interference with the exclusive possession or ownership of the land. The concept has become increasingly important in recent years due to land use conflicts posed by large-scale, industrialized confinement livestock operations. Indeed, the industrialization of agriculture has given rise to nuisance suits brought by farmers against large-scale agricultural operations.
Nuisance law prohibits land uses that unreasonably and substantially interfere with another individual's quiet use and enjoyment of property. The doctrine is based on two interrelated concepts: (1) landowners have the right to use and enjoy property free of unreasonable interferences by others; and (2) landowners must use property so as not to injure adjacent owners.
Nuisance law is rooted in the common law and has been developed over several centuries as courts settled land use conflicts. Nuisance law is always changing, and the legal rules vary between jurisdictions. Nuisance law is important to agriculture because of the noxious odors produced by many farm operations, especially those involving livestock production.
The two primary issues at stake in any agricultural nuisance dispute are whether the use alleged to be a nuisance is reasonable for the area and whether the use alleged to be a nuisance substantially interferes with the use and enjoyment of neighboring land. Another issue may be whether the complained-of activity is protected by a state right-to-farm statute.
All of these concepts were involved in this case. Here, the plaintiffs were pre-existing neighbors to the defendant’s large-scale confinement hog feeding facility conducted by a third-party farming operation via contract. The facility annually maintained nearly 15,000 of the defendant’s hogs that generated about 153,000 pounds of feces and urine every day. The waste was disposed of via lagoons and by spreading it over open “sprayfields” on the farm. The plaintiffs sued in state court in 2013 for nuisance violations, but later dismissed that action and refiled in federal court after learning of the defendant’s control over the hog feeding facility naming the defendant as the sole defendant.
The federal trial court coordinated 26 related cases against similar hog production operations brought by nearly 500 plaintiffs into a master case docket and proceeded with trials in 2017. In this case, the jury awarded $75,000 in compensatory damages to each of 10 plaintiffs and $5 million in punitive damages to each plaintiff. The punitive damage award was later reduced to $2.5 million per plaintiff after applying a state law cap on punitive damages.
On appeal, the appellate court determined that the trial court had properly allowed the plaintiffs’ expert testimony to establish the presence of fecal material on the plaintiffs’ homes and had properly limited the expert witness testimony of the defendant concerning odor monitoring she conducted at the hog facility. The appellate court also rejected the defendant’s claim that the third party farming operation should be included in the case as a necessary and indispensable party. The appellate court also affirmed the trial court’s holding concerning the availability of compensatory damages beyond the rental value of the property and the jury instruction on nuisance. The appellate court also concluded that the trial court properly submitted the question of punitive damages to the jury. The appellate court reversed the trial court’s admission of financial information of the defendant’s corporate grandfather and combining the punitive damages portion of the trial with the liability portion, but held that such errors did not require a new trial. However, the appellate court remanded the case for a consideration of the proper award of punitive damages without consideration of the grandparent’s company’s financial information (such as compensation amounts to corporate executives).
It’s also important to note that while North Carolina law was involved in this case, as a result of this litigation several states, including Nebraska and Oklahoma, have recently amended their state right-to-farm laws with the intent of strengthening the protections afforded farming operations.
Overtime Exemption for Dairy Workers Unconstitutional.
Martinez-Cuevas v. Deruyter Brothers Dairy, Inc., No. 96267-7, 2020 Wash. LEXIS 660 (Wash. Sup. Ct. Nov. 5, 2020)
Federal law provides an exemption from paying overtime wages for persons employed in agriculture. Many states have a comparable exemption. In this case, the exemption contained in Washington law was at issue.
The plaintiffs brought a class action on behalf of 300 of the defendant’s workers challenging the exemption of dairy workers from overtime pay under the Washington Minimum Wage Act. The plaintiffs also claimed that the defendant violated other wage and hour rules. The plaintiffs claimed that the overtime exemption violated the equal protection clause in the state constitution and was racially biased against Hispanic workers.
The state Supreme Court, in a 5-4 decision, the majority held that the exemption undermined a “fundamental right” to health and safety protections for workers in dangerous jobs that the state Constitution guarantees via the privileges and immunities clause. The majority focused on Article II, Sec. 35 of the Washington Constitution requiring the legislature to pass law necessary “for the protection of persons working in…employments dangerous to life or deleterious to health,” and Article I which the majority construed as protecting “fundamental rights of state citizenship.” The majority believed that there was a connection between the requirement that the legislature pass laws to protect workers in dangerous occupations and the minimum wage law, and that the legislature didn’t have a reasonable basis to exclude dairy workers from the overtime pay requirements of the law.
The dissenting justices pointed out that overtime pay is not a fundamental constitutional right and, as such, does not implicated the privileges and immunities clause. Instead, the state legislature has a “wide berth” to decide that laws that are required to carry out that purpose. The dissent pointed out that the legislature could simply repeal the overtime law and no person would have a personal or private common law right to insist on overtime pay absent an employment contract with a term promising overtime pay.
The ruling means that dairy farmers will be required to pay $20.54 per overtime hour beginning in 2021. That is the case, of course, for the workers that still have a job, have overtime hours and aren’t displaced by automation.
Lifetime Ban on Owning Firearms For Filing Tax Returns With False Statement
Folajtar v. The Attorney General of the United States, No. 19-1687, 2020 U.S. App. LEXIS 37006 (3rd Cir. Nov. 24, 2020)
Any law that impairs a fundamental constitutional right (any of the first ten amendments to the Constitution) is subject to strict scrutiny – or at least it’s supposed to be. The right to bear arms, as the Second Amendment, is a fundamental constitutional right. Thus, any law restricting that right is to be strictly scrutinized. But, does a convicted felon always permanently lose the right to own a firearm. What if the felony is a non-violent one? These questions were at issue in this case.
The plaintiff pleaded guilty in 2011 to willfully making a materially false statement on her federal tax returns. She was sentenced to three-years’ probation, including three months of home confinement, a $10,000 fine, and a $100 assessment. She also paid back taxes exceeding $250,000, penalties and interest. Her conviction triggered 18 U.S.C. §922(g)(1), which prohibits those convicted of a crime punishable by more than one year in prison from possessing firearms. The plaintiff’s crime was punishable by up to three years’ imprisonment and a fine of up to $100,000.
As originally enacted in 1938, 18 U.S.C. §922(g)(1) denied gun ownership to those convicted of violent crimes (e.g., murder, kidnapping, burglary, etc.). However, the statute was expanded in the 1968. Later, the U.S. Supreme Court recognized gun ownership as an individual constitutional right in 2008. District of Columbia v. Heller, 554 U.S. 570 (2008). In a split decision, the majority reasoned that any felony is a “serious” crime and, as such, results in a blanket exclusion from Second Amendment protections for life. The majority disregarded the fact that the offense was non-violent, was the plaintiff’s first-ever felony offense, and was an offense for which she received no prison sentence. The majority claimed it had to rule this way because of deference to Congressional will that, the majority claimed, created a blanket, categorical rule.
The dissent rejected the majority’s categorical rule, pointing out that the plaintiff’s offense was nonviolent, and no evidence of the plaintiff’s dangerousness was presented. The dissent also noted that the majority’s “extreme deference” gave legislatures the power to manipulate the Second Amendment by simply choosing a label. Instead, the dissent reasoned, when the fundamental right to bear arms is involved, narrow tailoring to public safety is required. Because the plaintiff posed no danger to anyone, the dissent’s position was that her Second Amendment rights should not be curtailed. Likewise, because gun ownership is an individual constitutional right, the dissent pointed out that the Congress bears a high burden before extinguishing it. Post-2008, making a categorical declaration is insufficient to satisfy that burden, according to the dissent.
Expect this case to be headed to the U.S. Supreme Court. Justices Barrett and Kavanaugh have already indicated that they agree with the dissent based on their comments in earlier cases.
Conclusion
There are always significant developments in the law impacting farmers and ranchers and rural landowners. The three court opinions discussed in this article are each significant in their own respect. Stay informed. And, on this Thanksgiving Day 2020, if you don’t have everything you want, be thankful for the things you don’t have that you don’t want.
November 26, 2020 in Civil Liabilities, Criminal Liabilities, Income Tax, Regulatory Law | Permalink | Comments (0)
Monday, October 12, 2020
Principles of Agricultural Law
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, April 8, 2020
Hemp Production - Regulation and Economics
Overview
The 2018 Farm Bill legitimized the commercial production of hemp by removing it from being a “controlled substance” under federal law. As a result, it becomes another possible crop for commercial production. But, many questions abound surrounding hemp production. What must a producer know to engage in the commercial production of hemp? Will there be a market for hemp that is produced? Are any special loans available to help start up the hemp growing operation? What about labeling and licensing requirements? How can risk best be managed? How should contracts for the production of hemp be structured?
As part of the requirements for my agricultural law course at the law school, Emily J. Young, devoted her research paper to the topic of hemp production. Emily will be graduating from Washburn Law School next month. Today’s post is the result of her research into the matter.
Questions surrounding hemp production - it’s the topic of today’s post.
2018 Farm Bill
Historically, federal law made no distinction between hemp and other cannabis plants. They were considered to be a Schedule I drug – a controlled substance under federal law. However, the Agriculture Improvement Act of 2018, P.L. 115-334 (also known as the 2018 Farm Bill), removed hemp from the Controlled Substances Act. 21 U.S.C. §§801 et seq. While hemp is a plant from the cannabis family, the 2018 Farm Bill excludes hemp from the statutory definition of marijuana under the Controlled Substance Act if it contains a delta-9 tetrahydrocannabinol (THC, marijuana’s primary psychoactive chemical) concentration of not more than 0.3% on a dry weight basis. 7 USC § 1639o(1).
In addition, the 2018 Farm Bill establishes a framework where the states and the federal government share regulatory authority over hemp production. See generally 7 U.S.C § 5940; 7 CFR Part 990. Section 10111 of the 2018 Farm Bill requires each state department of agriculture to consult with the state’s governor and attorney general to develop a plan for hemp licensing and regulation. The plan must be submitted to the United States Department of Agriculture (USDA). A state’s plan cannot be implemented until the USDA approves it. If a state does not develop its own regulatory program for hemp, the USDA will develop a system regulating hemp growers in that state.
Kansas enacted industrial hemp legislation in 2018 (K.S.A. 2018 Supp. 2-3901 et seq.) and experienced its first harvest in 2019. The Industrial Hemp Research Program is administered through the Kansas Department of Agriculture (KDA). The KDA anticipates making a Commercial Industrial Hemp Program available for the 2020 growing season, but the timeline and transition to a commercial program is presently unknown. The KDA submitted the state plan on January 23, 2020 for inclusion into the U.S. Domestic Hemp Production Program and is awaiting a response. Currently, the KDA lists 24 active processor licenses that may accept hemp during the 2020 growing season.
The 2018 Farm Bill also provides that farmers growing industrial hemp can receive banking services in the same manner available to farmers of other commodities. Indeed, the Board of Governors of the Federal Reserve System along with the Federal Deposit Insurance Corporation, Financial Crimes Enforcement Network, Office of the Comptroller of the Currency, and the Conference of State Bank Supervisors issued a joint press release on December 3, 2019 emphasizing that banks are no longer required to file a Suspicious Activity Report (SAR) for customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations. However, for hemp-related customers, the Board of Governors indicated that banks are expected to follow standard SAR procedures and file a SAR if indicia of suspicious activity is present.
While the 2018 Farm Bill legalizes hemp, the production of hemp is more heavily regulated than is the production of other crops due to the effect of the presence of Cannabidiol (CBD), the natural compound in the flower of the female cannabis plant, which is contained in both the hemp and marijuana varieties. While the CBD derived from hemp does not contain THC at illegal levels, the present uncertainty concerning hemp varieties and growing methods could, at least theoretically, potentially cause illegal levels of THC to be present in a harvested hemp crop. In addition, hemp has a similar appearance to marijuana that can make it more difficult for law enforcement officials to enforce drug laws governing marijuana.
Thus, while marijuana remains a Schedule I controlled substance (making illegal its cultivation and sale) CBD can legally be produced from hemp if it is produced by a licensed grower in accordance with federal and state regulations. In 2018, there were approximately 75,000 acres of hemp grown via permit in the U.S. It is estimated that permitted U.S. acres of hemp grown in 2019 was between 100,000 and 200,000.
Production Methods and Economics
Farmers grow hemp for grain, fiber, and floral material. Hemp is usually planted between May and June and harvested in September or October. It is either cultivated as a row crop or via a horticultural method. Row crop cultivation is generally cheaper and less risky compared to horticultural cultivation and is typically used to grow grain and fiber. The horticultural method involves hemp growing in a manner similar to marijuana. The grower typically uses clone plants (cuts from the mother plant) instead of seeds to have a more uniform crop and higher CBD content. January 2020 pricing indicates that a prospective grower would pay an average of $4.25/plant for clone plants. Plant spacing under the horticultural method is approximately of 1,000 to 2,200 plants per acre. If the crop is grown for CBD extraction, the current market price is anywhere between $63 and $675 per pound for the hemp flower and approximately $1.00 per percent of CBD per pound for biomass (the organic material of the hemp plant remaining after the flower is harvested and processed). Each plant yield approximately one pound of flower. CBD content varies based on the variety planted and the growing conditions.
The January 2020 industrial seed price average ranged from $3.72 to $8.00 per pound, with an average price of $4.57. Viable seeding density is 25 to 35 pounds per acre. Hemp grain can sell for an amount between $0.60 to $1.70 per pound, and on average, a farmer can harvest 1,100 pounds of grain per acre. This “traditional” hemp is grown for the manufacture of such items as textiles and bioplastics, and is drilled in a manner comparable to wheat at an approximate rate of 100 plants per square yard. The plant grows tall with the tops harvested for seed production. It is the stalks that are used for industrial purposes.
After input and harvest costs, farmers can net approximately $250-300 per acre on grain (traditional hemp). Hemp fiber is presently selling for approximately $275 per ton, and crops can yield between 4 and 5 tons of hemp fiber per acre. These returns are presently higher than returns on corn, soybeans and wheat. According to data from the Department of Agricultural Economics at Kansas State University, a Kansas farmer in the North Central region of the state can expect net revenue of $46.20 per acre on corn; $48.12 per acre on soybeans and a net loss of $62.93 per acre on wheat. https://agmanager.info/farm-mgmt-guides/2020-farm-management-guides-non-irrigated-crops.
Funding the operation
The 2020 growing season is the first-time hemp producers are eligible to apply for operating, ownership, beginning farmer, and farm storage facility loans through the Farm Service Agency (FSA). A complete loan application requires proof of crop insurance (unless ineligible); a farm operating plan with income history; and a contract for the sale of the crop. New growers are likely unable to secure a purchase contract before the season starts. As a result, most hemp producers in Kansas are either using private funding or local credit unions.
Initial license requirements
As of March 2020, the Industrial Hemp Research Program is the only program available to growers in Kansas. Anyone interested in a license for 2021 growing season should review the application checklists to determine the requirements and fees associated with the type of license being sought. See https://agriculture.ks.gov/divisions-programs/plant-protect-weed-control/industrial-hemp/industrial-hemp-applications.
A license is required for the listing and use of an approved variety of industrial hemp. K.A.R. 4-34-5(e)(1) https://agriculture.ks.gov/docs/default-source/pp-industrial-hemp/approved-varieties-final.pdf?sfvrsn=9faf85c1_4. Only authorized seeds or clone plants are permitted to be grown at this time unless otherwise approved by the KDA during the application process. K.A.R. 4-34-2; 2018 Supp. K.S.A. 2-3901(b)(11). Authorized seeds include properly imported seeds or clones from another state and accompanied with a proper certification label or seeds from local Kansas distributers that have been tested and the certificate of analysis (COA) meets KDA standards. 2018 Supp. K.S.A. §2-3901(b)(11). These labels will need to be retained until the pre-harvest inspection (and for 5 years after) to prove that the hemp inspected was grown from the seeds or clones as shown on the label. §§K.A.R. 4-34-17; K.A.R. 4-34-21.
Risk Management
Several private insurance companies offer small hail policies and limited coverage for hemp growers. The USDA presently offers two programs to help with loss of a hemp crop. Producers may apply now through their local FSA office, and the deadline to sign up for both programs was March 16, 2020. However, these programs do not cover loss of ‘hot’ crops (THC in excess of 0.3%).
Multi-Peril Crop Insurance Pilot Insurance Program. This program provides coverage against loss of yield because of insurable causes (natural causes such as weather, insects and disease) of loss for hemp grown for fiber, grain or Cannabidiol (CBD) oil. There are minimum acreage requirements - 5 acres for CBD and 20 acres for grain and fiber. To be eligible for MPCI, a hemp producer must also have at least a one-year history of production and have a contract for the sale of the insured hemp. The program is available in 21 states, including Kansas.
Noninsured Crop Disaster Assistance Program. This program protects against losses associated with lower yields, destroyed crops or prevented planting where no permanent federal crop insurance program is available. In general, assistance is available for losses that exceed 50 percent of the crop or for prevented plantings that exceed 35 percent of the intended crop acres. The amount paid is 55 percent of the average market price for crop losses.
Contractual Issues
Types of contracts. A purchase contract is typically entered into after a grower has completed harvest or immediately before harvest once quantity and grade of the crop is known. The buyer then makes a purchase offer for the crop with the price reflecting market demands and crop quality.
A production contract is an agreement entered into between the grower and buyer for the crop before planting. The contract denotes the obligations of the parties and specifies the quantity, quality, and price or a method to determine price of the crop. Under a production contract, a processor usually supplies the seed and inputs and the grower provides the labor and the land. The harvested crop is then delivered to the processor who pays the agreed upon price adjusted for certain contract specifications. Typically, under a production contract, the grower has no ownership rights in the seed or the harvested crop. As such, the grower cannot legally sell the crop to a third party or pledge it as collateral.
Under a split processing agreement, the processor extracts the CBD and returns a portion of the finished product to the grower. Under a typical agreement, the processor retains 40 percent of the extract as the processing fee and returns 60 percent to the grower either in kind or in accordance with market value.
Quantity. A contract may require production from a set number of acres or the delivery of pounds of biomass. If production from an acreage is specified, the grower is obligated to deliver all the crop produced on the identified acres in accordance with a “best efforts” or “best farming practices” measure of performance. Thus, if there is complete crop failure and the grower has utilized “best efforts” or utilized “best farming practices,” the grower is not liable for the shortfall and the buyer is not obligated to pay. Currently, litigation in Oregon involves claims surrounding a “best farming practices” clause. See https://hempindustrydaily.com/oregon-hemp-production-lawsuits-may-offer-lessons-for-farmers/.
Alternatively, a contract may contain a “passed acreage clause.” This clause allows the buyer to refuse acceptance of the entire crop produced from the designated acreage. This clause is common in vegetable contracts and may could be utilized in hemp contracts.
A contract could also be structured as an output contract where no quantity is specified, and the grower sells the entire output to the buyer.
Quality and crop conditions. A contract will likely set forth quality standards for the crop and how those quality standards are to be established. Related provisions will denote acts that can give rise to contract termination, the grower’s right to cure and whether the grower retains the right to sell the crop if a processor (buyer) rejects it.
A contract will likely contain language specifying the condition of the crop on delivery and the buyer’s right of inspection. A processor may require a sample from each load a grower brings in before accepting the crop. They may also want to specify the timeframe they have to inspect the crop to account for changes in the crop. For example, contract language may address the issue of crop rejection as well as applicable discounts if a delivered crop’s CBD content falls below the contract-specified percentage after delivery but before processing. This clause could also address any related pricing issues associated with the change in CBD or THC content from time of delivery to time of processing.
Force majeure events/cancellation provision. A force majeure provision allows a party to suspend or terminate its obligations when certain events happen beyond their control. Such a clause may be present in a contract involving hemp production with thought given to triggering events.
Other provisions. Additional contract clauses may address such matters as choice of law and dispute resolution.
Tax Issues
I.R.C. §280E limits income tax deductions for businesses that traffic in controlled substances to cost-of-goods-sold (COGS) as an adjustment to gross receipts. See also C.C.A. 201504011 (Dec. 12, 2014). Because hemp is no longer a Schedule I controlled substance, the I.R.C. §280E limitations don’t apply. While hemp producers and resellers must follow the inventory costing methods of Treas. Reg. §1.471, they are not subject to the uniform capitalization rules if average gross receipts are $25 million or less (inflation-adjusted for years beginning after 2017) for the three preceding tax years and the business does not fall within the definition of a “tax shelter.” Likewise, if these tests are met, the business need not calculate an I.R.C. §263A adjustment.
Conclusion
The removal of hemp as a federally controlled substance provides another crop growing option for growers to consider. However, the regulatory system governing hemp production is complex and involves both state and federal regulatory bodies. Contracts for hemp production also present unique issues. Economically, hemp production can be an addition to a farmer’s common crop production routine or may serve as an alternative depending on anticipated net revenues. Is hemp the present-day equivalent of the Jerusalem Artichoke of the 1980s? Only time will tell.
April 8, 2020 in Contracts, Criminal Liabilities, Income Tax, Regulatory Law | Permalink | Comments (0)
Tuesday, February 4, 2020
Is An Abandoned Farmhouse a “Dwelling”?
Overview
Farmers and ranchers often own property that is in remote locations and is out in the open where it is potentially subject to theft and/or burglary. Sometimes, the old homestead remains standing and is used for storage or some other function other than as a residence. Protecting personal property that is contained in such a building presents the issue of what the proper manner of providing protection might be. See, e.g., Katko v. Briney, 183 N.W. 2d 657 (Iowa 1971). Another issue involves what the property classification of the crime is if the dwelling is broken into and items are stolen.
The crime classification of burglary of an old farmstead – that’s the topic of today’s post.
Common Law and Modern Approaches
The common law defines burglary as the trespassory breaking and entering of the dwelling house of another in the nighttime with the intent to commit a felony. The intent to commit a felony must accompany the breaking and entering. Thus, under the common law approach, a person who did not have the intent to commit a felony at the time of breaking and entering someone else's dwelling could not be convicted of burglary even if the perpetrator had a change of heart and stole something once inside the home. On the other hand, a defendant who intended to commit a felony at the time of breaking and entering a dwelling could be convicted of burglary even if nothing was stolen.
Modern burglary statutes in many jurisdictions eliminate most of the common law elements of burglary. Prior to its repeal effective July 1, 2011, Kansas law defines “burglary” as “knowingly and without authority entering into or remaining within any...building, manufactured home, mobile home, tent or other structure which is not a dwelling, with the intent to commit a felony, theft or sexual battery therein...”. Kan. Stat. Ann. § 21-3715(b). That statutory language had been held to be inapplicable to an open-faced lean-to attached to the side of a workshop, because the lean-to did not provide an enclosed space for the security of persons or property contained therein. State v. Moler, 2 P.3d 773 (Kan. 2000).
The Model Penal Code (MPC) defines burglary as “the entering of a building or occupied structure, or separately secured or occupied portion thereof, with purpose to commit a crime therein, unless the premises are at the time open to the public or the actor is licensed or privileged to enter.” Under the MPC, burglary is a felony if it is committed in another person's home at night or if the perpetrator “purposely, knowingly, or recklessly” injured another person or attempted to do so or “is armed with explosives or a deadly weapon.” Model Penal Code §221.1.
When Is a Farmhouse Not a “Dwelling”?
In State v. Downing, No. 116,629, 2017 Kan. App. Unpub. LEXIS, 1092 (Kan. Ct. App. Dec. 15, 2017), aff’d., No. 116,629, 2020 Kan. LEXIS 6 (Kan. Sup. Ct. Jan. 24, 2020), the State of Kansas charged the defendant with burglary of a dwelling and attempted theft of property valued at less than $1,000. A jury found the defendant guilty of both crimes, and the court ordered the defendant to a Community Corrections facility for 24 months. The underlying sentence was 21 months in prison for burglary and six months in jail for theft, with the sentences to be served concurrently.
On appeal, the appellate court reversed. The appellate court noted that K.S.A. §21-5807(a)(1) (the replacement statutory provision for Kan. Stat. Ann. §21-3715) defines burglary as “without authority, entering into or remaining within any… [d]welling, with intent to commit a felony, theft, or sexually motivated crime therein.” “Dwelling” is defined as a building that is used or intended to be used as a human habitation, home, or residence.
The appellate court noted that the residence at issue was a 100- year old farmhouse that was used to store personal items that had been vacant for over two years prior to the alleged crime, and the owner had no intent to again live in it or rent it. Instead, it was used as storage space. Accordingly, the farmhouse did not meet the statutory definition of “dwelling” that was used or intended to be used as a habitation, and the State failed to prove beyond a reasonable doubt that the house was a dwelling. The appellate court reversed the defendant’s conviction for burglary of a dwelling and vacated her sentence.
On further review, the state Supreme Court affirmed on the basis that the evidence revealed that the landowner lacked the present intent to use the farmhouse as a dwelling. The Supreme Court also rejected the State’s argument that the defendant should have been resentenced because that issue was not raised below.
Conclusion
The recent Kansas Supreme Court decision points out another interesting facet of agricultural law. An old farmhouse that is no longer occupied as a residence may not qualify as a “dwelling” under state law defining burglary of a dwelling. But, remember, what constitutes a “dwelling” for this purpose is tied to a particular state’s statutory definition. Just another thing to keep in mind when considering steps to be taken to protect farm property contained in such a structure from those that would attempt to steal those items.
February 4, 2020 in Criminal Liabilities | Permalink | Comments (0)
Monday, January 27, 2020
Ag Law and Tax in the Courts – Bankruptcy Debt Discharge; Aerial Application of Chemicals; Start-Up Expenses and Lying as Protected Speech
Overview
A couple of weeks ago I did a post on some recent developments in the courts involving ag law and ag tax. Since that time, there have been additional important court developments. Before getting deep into tax season, it may be a good idea to provide a summary of a few of these cases.
More ag law and tax developments in the courts – it’s the topic of today’s post.
Bankruptcy Discharge and Fraud
In re Kurtz, 604 B.R. 349 (Bankr. D. Neb. 2019)
A major feature of bankruptcy in the United States is the ability to discharge at least some debt. This makes possible the “fresh start” for debtors. But, some debtors and debts are not eligible for discharge. Of the several categories of debts that aren’t eligible for discharge, one category is reserved for debts associated with the debtor’s fraudulent conduct. In this case, the creditor was a landlord and the debtor was the farm tenant who put up hay and other crops on the landlord’s land. The parties did not have a written lease agreement, but the landlord assumed the lease was a 50-50 crop share agreement where the parties would split the expenses and the sale proceeds equally. The record was unclear as to what the tenant understood the relationship to be, but he did make statements to others that it was a cash rent lease. The tenant did not pay the landlord after the first two cuttings of hay because he incurred expenses while cutting. After the third cutting was bailed the landlord contacted the tenant about payment. The tenant told the landlord that he could have the proceeds from the third cutting of hay and that the tenant was finished farming for the landlord. The tenant paid a third party to stack the hay. When the landlord attempted to sell the hay he discovered that the tenant had already given the hay to a third party to settle a debt. Both parties submitted expenses related to the hay crop that year.
The landlord filed a complaint in the tenant’s bankruptcy case alleging fraud and misrepresentation seeking that the debt to the landlord not be discharged. The bankruptcy court agreed, determining that the landlord proved that the tenant’s obligation of $5,916.50 was exempt from discharge because of the debtor’s false representation. The bankruptcy court determined that the full debt owed to the landlord was $22,292.84 based on the oral lease, but that the only part of that amount derived from fraud was the amount related to the third cutting of hay - $5,370.50 plus $546 for stacking. The balance of the unpaid debt arose from a general misunderstanding that wasn’t settled before the debtor put up the first two hay cuttings. The only blatant dishonesty, the bankruptcy court determined, concerned the third cutting.
Aerial Application of Ag Chemicals Not Inherently Dangerous
Keller Farms, Inc. v. Stewart, No. 1:16 CV 265 ACL, 2018 U.S. Dist. LEXIS 210209 (E.D. Mo. Dec. 13, 2018), aff’d. sub. nom., Keller Farms, Inc. v. McGarity Flying Service, LLC, No. 18-3755, 2019 U.S. App. LEXIS 36664 (8th Cir. Dec. 11, 2019)
This case involves a dispute involving alleged damage to the plaintiffs’ trees caused by chemicals that allegedly drifted during aerial application. The plaintiffs attempted to hold liable both the aerial applicator and the landowner that hired the applicator. The plaintiffs claimed the landowner was vicariously liable (liable because of the relationship with the applicator) for the applicator’s actions because aerial spraying of burndown chemicals is an "inherently dangerous activity." The trial court granted the defendants’ motion for Judgment as a Matter of Law on the plaintiff's trespass claim, but the remaining issues were left for the jury to resolve. The jury returned a verdict in favor of the defendants on the negligence and negligence per se claims. The plaintiffs filed a motion for a new trial, arguing the verdict was against the weight of the evidence; that the trial court erred in excluding evidence; and that the trial court erred in granting the defendants’ Motion for Judgment as a Matter of Law. The trial court, however, denied the plaintiff’s motion for a new trial.
On appeal, the appellate court affirmed. The appellate court determined that the jury’s verdict was not against the weight of the evidence, and that the aerial application of herbicides was commonplace and not inherently dangerous. In addition, the appellate court noted that the defendants’ evidence was that the herbicides did not actually drift onto the plaintiffs’ property and that the applicator complied with all label requirements and sprayed during optimal conditions. The appellate court also determined that the trial court had ruled properly on evidentiary matters and that the plaintiff had not proven the alleged monetary damages to the trees properly. The appellate court also upheld the trial court’s denial of the plaintiff’s motion for a new trial.
The Line Between Nondeductible Start-Up Expenses and Deductible Business Expenses
Primus v. Comr., T.C. Sum. Op. 2020-2
The petitioner lived in New York and bought a property in Quebec containing 200 maple trees with a significant number of them being mature, maple syrup-producing trees. The tract contained other types of trees and pasture ground and hay fields and a small amount of ground suitable for growing crops. There were also various improvements on the tract. Before collecting sap and producing syrup, the petitioner thinned underbrush and later installed a pipeline to collect sap. Sap production began in 2017. When the petitioner bought the property in 2012, the cleared the areas of the tract where he planned to plant blueberry bushes. He ordered 2,000 blueberry bushes in 2014 and planted them in 2015. He reported a substantial amount of farming-related expenses in 2012 and 2013, with most of the expenses attributable to costs of repairs to improvements on the property. The petitioner deducted expenses attributable to preparatory costs for the production of selling maple syrup and blueberries as trade or business expenses under I.R.C. §162 (or as I.R.C. §212 expenses for income-producing property).
The IRS denied the deductions, asserting that they were nondeductible start-up expenses under I.R.C. §195 on the basis that the petitioner had not yet begun the business of producing maple syrup and blueberries. The Tax Court upheld the IRS position. The Tax Court noted that expenses are not deductible as trade or business expenses until the business is actually functioning and performing the activities for which it was organized. Here, the petitioner had not actually started selling blueberries or sap in either 2012 or 2013. That meant that the expenses incurred in 2012 and 2013 were incurred to prepare the farm to produce sap and plant blueberries, and were nondeductible startup expenses. The thinning activities, while a generally acceptable industry practice, did not establish that the business had progressed beyond the startup phase. In addition, during the years at issue, the petitioner had not collected sap, installed any infrastructure needed to convert sap into syrup, or bought any blueberry bushes.
Lying With Purpose of Harming Livestock Facility is Protected Speech
Animal Legal Defense Fund v. Schmidt, No. 18-2657-KHV, 2020 U.S. Dist. LEXIS 10202 (D. Kan. Jan. 22, 2020)
The plaintiffs are a consortium of activist groups regularly conduct undercover investigations of livestock production facilities. Some of the plaintiffs gain access to farms through employment without disclosing the real purpose for which they seek employment (and lie about their ill motives if asked) and wear body cameras while working. For those hired into managerial and/or supervisory positions, they gain the ability to close off parts of the facility to avoid detection when filming and videoing. The film and photos obtained are circulated through the media and with the intent of encouraging public officials, including law enforcement, to take action against the facilities. The employee making the clandestine video or taking pictures, is on notice that the facility owner forbids such conduct via posted notices at the facility. The other plaintiffs utilize the data collected to cast the facilities in a negative public light, but do no “investigation.”
In 1990, Kansas enacted the Kansas Farm Animal and Field Crop and Research Facilities Protect Act (Act). K.S.A. §§ 47-1825 et seq. The Act makes it a crime to commit certain acts without the facility owner’s consent where the plaintiff commits the act with the intent to damage an animal facility. Included among the prohibited acts are damaging or destroying an animal facility or an animal or other property at an animal facility; exercising control over an animal facility, an animal from an animal facility or animal facility property with the intent to deprive the owner of it; entering an animal facility that is not open to the public to take photographs or recordings; and remaining at an animal facility against the owner's wishes. K.S.A. § 47-1827(a)-(d). In addition, K.S.A. § 47-1828 provides a private right of action for "[a]ny person who has been damaged by reason of a violation of K.S.A. § 47-1827 against the person who caused the damage." For purposes of the Act, a facility owner’s consent is not effective if it is induced by force, fraud, deception duress or threat. K.S.A. § 47-1826(e). The plaintiff challenged the constitutionality of the Act, and filed a motion for summary judgment. The defendant also motioned for summary judgment on the basis that the plaintiffs lacked standing or, in the alternative, the Act barred trespass rather than speech.
On the standing issue, the trial court held that the plaintiffs lacked standing to challenge the portions of the Act governing physical damage to an animal facility (for lack of expressed intent to cause harm) and the private right of action provision, However, the trial court determined that the plaintiffs did have standing to challenge the exercise of control provision, entering a facility to take photographs, etc., and remaining at a facility against the owner’s wishes to take pictures, etc. The plaintiffs that did no investigations but received the information from the investigations also were deemed to have standing on the same grounds. On the merits, the trial court determined that the Act regulates speech by limiting what the plaintiffs could say and by barring pictures/videos. The trial court determined that the provisions of the Act at issue were content-based and restricted speech based on viewpoint – barring only that speech that would harm an animal facility. The trial court determined that barring lying is only constitutionally protected when it is associated with a legally recognizable harm, and the Act is unconstitutional to the extent it bars false speech intended to damage livestock facilities. Because the provisions of the Act at issue restrict content-based speech, its constitutionality is measured under a strict scrutiny standard. As such, a compelling state interest in protecting legally recognizable rights must exist. The trial court concluded that even if privacy and property rights involved a compelling state interest, the Act must be narrowly tailored to protect those rights. By focusing only on those intending to harm owners of a livestock facility, the Act did not bar all violations of property and privacy rights. The trial court also determined that the Governor was a proper defendant.
The status of the litigation presently rests with the Kansas Attorney General and the Governor to determine the next step(s) to be taken.
Conclusion
There is never a dull moment in agricultural law and taxation. I will provide more updates like this is in future posts.
January 27, 2020 in Bankruptcy, Civil Liabilities, Criminal Liabilities, Income Tax | Permalink | Comments (0)
Friday, January 17, 2020
Principles of Agricultural Law
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 46th 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; laywers, 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 as one recent bankruptcy case points out. See, e.g., In re Kurtz, 604 B.R. 549 (Bankr. D. Neb. 2019). 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?
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? For instance, in one recent Kansas case, the lender failed to get the debtor’s name exactly correct on the filed financing statement. The result was that the lender’s interest in the collateral (a combine and header) securing the loan was discharged in bankruptcy. In re Preston, No. 18-41253, 2019 Bankr. LEXIS 3864 (Bankr. D. Kan. Dec. 20, 2019).
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.
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.
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?
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 part and parcel of the business organization question.
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. 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. 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
The academic semesters at K-State and Washburn Law are about to begin for me. It is always encouraging to me to see students getting interested in the subject matter and starting to understand the relevance of the class discussions to reality. 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.
If you are interested in obtaining a copy, you can visit the link here: http://washburnlaw.edu/practicalexperience/agriculturallaw/waltr/principlesofagriculturallaw/index.html
January 17, 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)
Friday, May 10, 2019
More Ag Law and Tax Developments
Overview
It’s been a while since I have devoted a post to recent developments, so that’s what today’s post is devoted to. There are always many significant developments in ag law and tax. I was pleased recently when one of my law students, near the conclusion of the course, commented on how many areas of the law that agricultural law touches and how often the rules as applied to farmers and ranchers are different. That is so true. Ag law is daily life for a farmer, rancher, rural landowner, and agribusiness in action.
Recent development in ag law and tax – that’s the topic of today’s post.
Chapter 12 Plan Not Feasible
As I have written in other posts, when a farmer files Chapter 12 bankruptcy, the reorganization plan that is proposed must be feasible. That means that the farmer must estimate reasonable crop yields and revenue based on historical data, and also provide reasonable estimates of expenses. Courts also examine other factors to determine whether a reorganization plan is feasible.
In, In re Jubilee Farms, 595 B.R. 546, 2018 Bankr. LEXIS 4080 (Bankr. E.D. Ky. Dec. 28, 2018), the debtor, a farm partnership operated by two brothers, farmed primarily corn and soybeans. The Debtors filed Chapter 12 bankruptcy in early 2018. In May of 2018, the Debtors filed a joint Chapter 12 plan, but the secured creditors, FCMA and FCS, objected. The debtors filed an amended Chapter 12 plan providing FCMA with a fully secured claim of roughly $2.7 million and FCS with a fully secured claim of roughly $180,000. The plan provided for periodic payments funded primarily by the debtor’s farming income and supplemented by custom trucking and combining revenue. Additional funding in the first year would come from crop insurance and anticipated federal aid for farmers affected by political activity upsetting foreign crop sales.
The creditors and the Trustee objected to the confirmation of the amended plan on various grounds, but the main argument raised was that the amended plan was not feasible, because the debtor’s one-year income and expense projections were limited and unrealistic compared to the debtor’s historical income and expenses. An evidentiary hearing was held to present projected revenue and expenses for the farm and thus determine the feasibility (whether the debtor could make all plan payments and comply with the plan) of the amended plan.
The court analyzed the projected revenues and expenses for the coming year, and the concluded that the plan was not feasible because the debtors had failed to prove that the plan was feasible beyond March 2019. The court stated that if the debtors only had to prove they could make the payments required up to March 2019, the debtors would prevail because the testimony created a reasonable belief that the receipts necessary to make payments up to that time either had or would soon occur. However, beyond March 2019 that was not the case. The court compared the debtors’ projections to calculations using the yield and price per acre that was supported by the record. The record showed that the debtors could only pay anticipated operating expenses and plan payments after March 2019 if the debtor’s unsupported projections were used. The projections using the bushels per acre and price per bushel only showed revenue of $592,000 to $736,000 with expenses of $872,000. Given this lack of ability to pay combined with the debtor’s projections overstating revenue from soybean production during the 2019 crop year the court found that the debtors anticipated receipts simply did not cover the debtors’ obligations to pay operating expenses and plan payments beyond March 2019. Thus, the plan was not feasible and the court denied confirmation of the amended plan.
Grazing Scam Results in Fraud Convictions
There are various scams that one can get caught up in, but they don’t often involve cattle grazing. However, a recent case did involve a cattle grazing scam. In United States v. Hagen, No. 17-3279, 2019 U.S. App. LEXIS 6109 (8th Cir. Feb. 28, 2019), the defendant and his ex-wife set up a company to provide custom grazing in 2004. The ex-wife obtained grazing leases on tribal land from the Bureau of Indian Affairs ("BIA"). The defendant worked with ranchers to set up custom grazing contracts. In 2011, the BIA issued letters to the defendants for non-compliance with leasing procedures. In 2012, the defendants had leased enough pasture to sustain 57.92 cow-calf pairs but contracted to graze with three cattle producers for the lease of 100 cow-calf pairs and 200 heifers. That summer, 70 pairs were grazed for the full term of the grazing contract, and 33 pairs belonging to another rancher were grazed for a day. A third rancher was forced to find other pasture for his heifers. In 2013, the defendants had leased pasture for 91.26 pairs and had contracted with six different producers to graze a total of 380 pairs. A total of $126,500 was paid upfront by the producers. Not a single pair was grazed that summer and no rancher was reimbursed.
In 2014, the defendants had leased pasture for 6.67 pairs and again over-contracted with three ranchers for 300 pairs, who paid $102,500 up front. No pairs grazed during the summer of 2014 and the ranchers were not reimbursed. The defendants were charged with three counts of wire fraud, four counts of mail fraud, and one count of conspiracy to commit mail and wire fraud for their fraudulent contracting/leasing practices. The ex-wife plead guilty to the conspiracy count and testified against the her ex-spouse at trial. He was convicted by a jury on all eight counts. Sentencing included 46 months imprisonment and 3 years of supervised release on each count, restitution in the amount of $236,000, and a $100 special assessment on each count. The defendant appealed on the basis that the evidence was insufficient to prove he had the requisite intent to defraud, and that the two mailings were not in furtherance of any fraud.
The appellate court affirmed the defendant’s conviction of conspiracy to commit mail and wire fraud, but vacated the conviction and special assessments on the other five substantive counts. The appellate court determined that sufficient evidence supported the jury verdict that the ex-husband had conspired to commit fraud by contracting with twelve different cattle producers to graze cattle. Only one of those contracts had been filled, and the defendants failed to issue refunds on the other contracts for the the 2012-2014 grazing seasons. The appellate court also found sufficient evidence to support the jury’s verdict of use of mail and wire to defraud. One of the ranchers had mailed the defendant a $35,000 check, as full payment for the grazing contract and the defendant had cashed the check using a wire transmission a week later. There was a pasture visit where a rancher was assured that the pasture could support 200 pairs. Another contract was signed by the rancher’s son, and another $35,000 check was written to the defendant. This second contract brought the total contracted to graze with the defendant to 200 pairs for $70,000. It later became evident that the defendant only had 40 acres leased, enough to sustain 6.67 pairs. When it came time for delivery, the defendant did not return any calls. The ranch did not graze any cattle that season nor issued refunds for their payments. The appellate court determined that the evidence was sufficient for the jury to conclude that the defendant knowingly only had enough pasture to graze 6 pairs but nonetheless contracted to graze 200 pairs with this rancher. However, the appellate court vacated the convictions and special assessments tied to specific instance of fraud against different ranchers. The dry conditions that limited the length of the grazing season likely lead to a breach of contract for early termination, rather than an intent to defraud. Other mailings by the defendants containing offers to graze cattle were not in furtherance of fraud, and the convictions and special assessments related to these mailings were vacated.
Fences, Boundary Lines and Adverse Possession
Fences and boundary issues present many court cases. It is certainly true that good fences make good neighbors. Bad fences and boundary disputes tend to bring out the worst in neighbors. A recent Alabama case illustrates the issues that can arise when fences and boundary issues are involved. In Littleton v. Wells, No. 2170948, 2019 Ala. Civ. App. LEXIS 20 (Civ. App. Feb. 22, 2019), a predecessor sold 82 acers to the defendants in 2015. This land had been in the same family for generations, however the seller had only been on the property “maybe twice” since 1989. The plaintiffs received title to their property from their parents, who had been there since 1964. There were three fences between the party’s properties. The defendant relied on a 1964 survey when making his purchase, thinking the property line was the middle fence. No survey was completed at that time.
In 2000, the mapping office notified the parties of a “conflict.” The office determined the actual boundary to be closer to the fence on the defendant’s property rather than the middle fence. However, this determination was for tax purposes and was not a substitute for a survey. The plaintiffs also treated the third fence line, like the map office, as the boundary line.
The plaintiffs grazed cattle up to the furthest fence and maintained all the ground between the fences as their own. The plaintiff also testified as to working on the furthest fence as a child in the 1960’s. The plaintiffs also showed that they held annual gatherings and the kids would play in the creek on the disputed ground. There was also evidence that the plaintiffs leased the disputed ground to others. The plaintiffs did not present all the witnesses as to the family’s use of the property up to the furthest fence. Nor was the employee of the map office testimony heard in court.
The trial court determined that the property line was to be the closer center fence, not the third fence as the plaintiffs claimed. The court ordered an official survey to their findings and entered that survey as the final order. The plaintiffs appealed. The appellate court reversed and remanded. The plaintiffs’ challenged the trial court’s denial of their adverse possession claim and determination of the location of the boundary line. The court looked at all the evidence on record from trial, when analyzing the plaintiff’s adverse possession claim. The appellate court held that the record showed that the plaintiffs had been in actual, hostile, open, notorious, exclusive, and continuous possession of the disputed property for more than ten years (the statutory timeframe). The plaintiffs had presented evidence to support every one of those elements and the defendants have not rebutted any element. The only evidence the defendant presented to rebut the plaintiffs’ evidence was a “belief” that he owned up to the second fence. Since the lower court was erroneous in determining the adverse possession claim, the appellate court did not need to analyze the boundary line determination. The court remanded to create a new boundary line that included the property that the plaintiffs had adversely possessed.
Conclusion
There’s never a dull moment in agricultural law. It’s everyday reality in the life of a farmer, rancher, rural landowner and agribusiness.
May 10, 2019 in Bankruptcy, Civil Liabilities, Criminal Liabilities | Permalink | Comments (0)
Monday, December 31, 2018
The "Almost Top Ten" Ag Law and Tax Developments of 2018
Overview
2018 was a big year for developments in law and tax that impact farmers, ranchers, agribusinesses and the professionals that provide professional services to them. It was also a big year in other key areas which are important to agricultural production and the provision of food and energy to the public. For example, carbon emissions in the U.S. fell to the lowest point since WWII while they rose in the European Union. Poverty in the U.S. dropped to the lowest point in the past decade, and the unemployment rate became the lowest since 1969 with some sectors reporting the lowest unemployment rate ever. The Tax Cuts and Jobs Act (TCJA) doubles the standard deduction in 2018 compared to 2017, which will result additional persons having no federal income tax liability and other taxpayers (those without a Schedule C or F business, in particular) having a simplified return. Wages continued to rise through 2018, increasing over three percent during the third quarter of 2018. This all bodes well for the ability of more people to buy food products and, in turn, increase demand for agricultural crop and livestock products. That’s good news to U.S. agriculture after another difficult year for many commodity prices.
On the worldwide front, China made trade concessions and pledged to eliminate its “Made in China 2025” program that was intended to put China in a position of dominating world economic production. The North-Korea/South Korea relationship also appears to be improving, and during 2018 the U.S. became a net exporter of oil for the first time since WWII. While trade issues with China remain, they did appear to improve as 2018 progressed, and the USDA issued market facilitation payments (yes, they are taxed in the year of receipt and, no, they are not deferable as is crop insurance) to producers to provide relief from commodity price drops as a result of the tariff battle.
So, on an economic and policy front, 2019 appears to bode well for agriculture. But, looking back on 2018, of the many ag law and tax developments of 2018, which ones were important to the ag sector but just not quite of big enough significance nationally to make the “Top Ten”? The almost Top Ten – that’s the topic of today’s post.
The “Almost Top Ten” - No Particular Order
Syngenta litigation settles. Of importance to many corn farmers, during 2018 the class action litigation that had been filed a few years ago against Syngenta settled. The litigation generally related to Syngenta's commercialization of genetically-modified corn seed products known as Viptera and Duracade (containing the trait MIR 162) without approval of such corn by China, an export market. The farmer plaintiffs (corn producers), who did not use Syngenta's products, claimed that Syngenta's commercialization of its products caused the genetically-modified corn to be commingled throughout the corn supply in the United States; that China rejected imports of all corn from the United States because of the presence of MIR 162; that the rejection caused corn prices to drop in the United States; and that corn farmers were harmed by that market effect. In April of 2018, the Kansas federal judge handling the multi-district litigation preliminarily approved a nationwide settlement of claims for farmers, grain elevators and ethanol plants. The proposed settlement involved Syngenta paying $1.5 billion to the class. The class included, in addition to corn farmers selling corn between September of 2013 and April of 2018, grain elevators and ethanol plants that met certain definition requirements. Those not opting out of the class at that point are barred from filing any future claims against Syngenta arising from the presence of the MIR 162 trait in the corn supply. Parties opting out of the class can't receive any settlement proceeds, but can still file private actions against Syngenta. Parties remaining in the class had to file claim forms by October of 2018. The court approved the settlement in December of 2018, and payments to the class members could begin as early as April of 2019.
Checkoff programs. In 2018, legal challenges to ag “checkoff” programs continued. In 2017, a federal court in Montana enjoined the Montana Beef Checkoff. In that case, Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America v. Perdue, No. CV-16-41-GF-BMM, 2017 U.S. Dist. LEXIS 95861 (D. Mont. Jun. 21, 2017), the plaintiff claimed that the federal law requiring funding of the Montana Beef Council (MBC) via funds from the federal beef checkoff was unconstitutional. The Beef Checkoff imposes a $1.00/head fee at the time cattle are sold. The money generated funds promotional campaigns and research, and state beef councils can collect the funds and retain half of the collected amount with the balance going to the Cattleman’s Beef Production and Research Board (Beef Board). But, a producer can direct that all of the producer’s assessment go to the Beef Board. The plaintiff claimed that the use of the collected funds violated their First Amendment rights by forcing them to pay for “speech” with which they did not agree. The defendant (USDA) motioned to dismiss, but the Magistrate Judge denied the motion. The court determined that the plaintiffs had standing, and that the U.S. Supreme Court had held in prior cases that forcing an individual to fund a private message that they did not agree with violated the First Amendment. Any legal effect of an existing “opt-out” provision was not evaluated. The court also rejected the defendant’s claim that the case should be delayed until federal regulations with respect to the opt-out provision was finalized because the defendant was needlessly dragging its heels on developing those rules and had no timeline for finalization. The court entered a preliminary injunction barring the MBC from spending funds received from the checkoff. On further review by the federal trial court, the court adopted the magistrate judge’s decision in full. The trial court determined that the plaintiff had standing on the basis that the plaintiff would have a viable First Amendment claim if the Montana Beef Council’s advertising involves private speech, and the plaintiff did not have the ability to influence the advertising of the Montana Beef Council. The trial court rejected the defendant’s motion to dismiss for failure to state a claim on the basis that the court could not conclude, as a matter of law, that the Montana Beef Council’s advertisements qualify as government speech. The trial court also determined that the plaintiff satisfied its burden to show that a preliminary injunction would be appropriate.
The USDA appealed the trial court’s decision, but the U.S. Court of Appeals for the Ninth Circuit affirmed the trial court in 2018. Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America v. Perdue, 718 Fed. Appx. 541 (9th Cir. 2018). Later in 2018, as part of the 2018 Farm Bill debate, a provision was proposed that would have changed the structure of federal ag checkoff programs. It did not pass, but did receive forty percent favorable votes.
GIPSA rules withdrawn. In the fall of 2016, the USDA sent to the Office of Management and Budget (OMB) an interim final rule and two proposed regulations setting forth the agency’s interpretation of certain aspects of the Packers and Stockyards Act (PSA) involving the buying and selling of livestock and poultry. The proposals generated thousands of comments, with ag groups and producers split in their support. The proposals concern Section 202 of the PSA (7 U.S.C. §§ 192 (a) and (e)) which makes it unlawful for any packer who inspects livestock, meat products or livestock products to engage in or use any unfair, unjustly discriminatory or deceptive practice or device, or engage in any course of business or do any act for the purpose or with the effect of manipulating or controlling prices or creating a monopoly in the buying, selling or dealing any article in restraint of commerce. The “effect” language of the statute would seem to eliminate any requirement that the producer show that the packer acted with the intent to control or manipulate prices. However, the federal courts have largely interpreted the provision to require a plaintiff to show an anti-competitive effect in order to have an actionable claim.
The interim final rule and the two proposed regulations stemmed from 2010. In that year, the Obama administration’s USDA issued proposed regulations providing guidance on the handling of antitrust-related issues under the PSA. 75 Fed. Reg. No. 119, 75 FR 35338 (Jun. 22, 2010). Under the proposed regulations, "likelihood of competitive injury" was defined as "a reasonable basis to believe that a competitive injury is likely to occur in the market channel or marketplace.” It included, but was not limited to, situations in which a packer, swine contractor, or live poultry dealer raises rivals' costs, improperly forecloses competition in a large share of the market through exclusive dealing, restrains competition, or represents a misuse of market power to distort competition among other packers, swine contractors, or live poultry dealers. It also includes situations “in which a packer, swine contractor, or live poultry dealer wrongfully depresses prices paid to a producer or grower below market value, or impairs a producer's or grower's ability to compete with other producers or growers or to impair a producer's or grower's ability to receive the reasonably expected full economic value from a transaction in the market channel or marketplace." According to the proposed regulations, a “competitive injury” under the PSA occurs when conduct distorts competition in the market channel or marketplace. The scope of PSA §202(a) and (b) was stated to depend on the nature and circumstances of the challenged conduct. The proposed regulations specifically noted that a finding that a challenged act or practice adversely affects or is likely to affect competition is not necessary in all cases. The proposed regulations also specified that a PSA violation could occur without a finding of harm or likely harm to competition, contrary to numerous court opinions on the issue.
On April 11, 2017, the USDA announced that it was delaying the effective date of the interim final rule for 180 days, until October 19, 2017, with the due date for public comment set at June 12, 2017. However, on October 17, 2017, the USDA withdrew the interim rule. The withdrawal of the interim final rule and two proposed regulations was challenged in court. On December 21, 2018, the U.S. Court of Appeals for the Eighth Circuit denied review of the USDA decision. In Organization for Competitive Markets v. United States Department of Agriculture, No. 17-3723, 2018 U.S. App. LEXIS 36093 (8th Cir. Dec. 21, 2018), the court noted that the USDA had declined to withdraw the rule and regulations because the proposal would have generated protracted litigation, adopted vague and ambiguous terms, and potentially bar innovation and stimulate vertical integration in the livestock industry that would disincentivize market entrants. Those concerns, the court determined, were legitimate and substantive. The court also rejected the plaintiff’s argument that the court had to compel agency action. The matter, the court concluded, was not an extraordinary situation. Thus, the USDA did not unlawfully withhold action.
No ”clawback.” In a notice of proposed rulemaking, the U.S Treasury Department eliminated concerns about the imposition of an increase in federal estate tax for decedents dying in the future at a time when the unified credit applicable exclusion amount is lower than its present level and some (or all) of the higher exclusion amount had been previously used. The Treasury addressed four primary questions. On the question of whether pre-2018 gifts on which gift tax was paid will absorb some or all of the 2018-2025 increase in the applicable exclusion amount (and thereby decrease the amount of the credit available for offsetting gift taxes on 2018-2025 gifts), the Treasury indicated that it does not. As such, the Treasury indicated that no regulations were necessary to address the issue. Similarly, the Treasury said that pre-2018 gift taxes will not reduce the applicable exclusion amount for estates of decedents dying in years 2018-2025.
The Treasury also stated that federal gift tax on gifts made after 2025 will not be increased by inclusion in the tax computation a tax on gifts made between 2018 and 2015 that were sheltered from tax by the increased applicable exclusion amount under the TCJA. The Treasury concluded that this is the outcome under current law and needed no regulatory “fix.” As for gifts that are made between 2018-2025 that are sheltered by the applicable exclusion amount, the Treasury said that those amounts will not be subject to federal estate tax in estates of decedents dying in 2026 and later if the applicable exclusion amount is lower than the level it was at when the gifts were made. To accomplish this result, the Treasury will amend Treas. Reg. §20.2010-1 to allow for a basic exclusion amount at death that can be applied against the hypothetical gift tax portion of the estate tax computation that is equal to the higher of the otherwise applicable basic exclusion amount and the basic exclusion amount applied against prior gifts.
The Treasury stated that it had the authority to draft regulations governing these questions based on I.R.C. §2001(g)(2). The Treasury, in the Notice, did not address the generation-skipping tax exemption and its temporary increase under the TCJA through 2025 and whether there would be any adverse consequences from a possible small exemption post-2025. Written and electronic comments must be received by February 21, 2019. A public hearing on the proposed regulations is scheduled for March 13, 2019. IRS Notice of Proposed Rulemaking, REG-106706-18, 83 FR 59343 (Nov. 23, 2018).
Conclusion
These were significant developments in the ag law and tax arena in 2018, but just not quite big enough in terms of their impact sector-wide to make the “Top Ten” list. Wednesday’s post this week will examine the “bottom five” of the “Top Ten” developments for 2018.
December 31, 2018 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, October 18, 2018
Agricultural Law Online!
Overview
For the Spring 2019 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 next spring’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 is available here:
https://eis.global.ksu.edu/CreditReg/CourseSearch/Course.do?open=true§ionId=127126
You can also find information about the text for the course at the following link (including the Table of Contents and the Index):
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 January!
Checkout the postcard (401 KB PDF) containing more information about the course and instructor.
October 18, 2018 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, September 14, 2018
What Difference Does It Make If I Post My Property “No Trespassing”?
Overview
A great deal of farm personal property is out in the open. From time to time, machinery and equipment may sit outside, and farm tools and supplies may also be out in the open. Of course, grazing livestock may be outside along with other farm property. Farm real estate may contain farm ponds, stock water tanks and other potential hazards. All of this raises concerns about public access to the premises and possible theft of property and potential liability issues. Similarly, livestock confinement operations have their own unique concerns about who has access to the property.
Does the posting of the property as “No Trespassing” have any legal consequence? It might. That’s the topic of today’s post.
Benefits of Posting
Criminal trespass. One potential benefit of posting property “No Trespassing” is that, in some states, what is otherwise a civil trespass can be converted to a criminal trespass. A criminal trespass gets the state involved in prosecuting the trespasser, and it might be viewed as having a greater disincentive to trespass than would a civil trespass. A civil trespass is prosecuted by the landowner personally against the alleged trespasser.
Search warrant. Another possible benefit of posting property “No Trespassing” is that it may cause a search warrant to be obtained before the property can be search for potential criminal conduct. Under the Fourth Amendment to the Constitution, unreasonable searches and seizures are prohibited absent a search warrant that is judicially-approved and supported by probable cause.
The search warrant issue and the posting of “No Trespassing” signs was the subject of a recent case from Vermont. In State v. Dupuis, 2018 VT 86 (Vt. Sup. Ct. 2018), a fish and game warden entered the defendant’s property via an adjoining property. The warden found a blind with a salt block and apples nearby. A rather precarious path through tough timber was used by the warden to avoid detection. The defendant was charged with baiting and taking big game by illegal means. At trial, the defendant and many others testified that there are “no trespassing” and “keep out” signs all around the property and on the gate to the public road. The warden stated that he did not see any of these signs. The defendant motioned to exclude the evidence because the warden never obtained a search warrant. The defendant claimed that he had a reasonable expectation of privacy throughout his property particularly because of the “No Trespassing” signs.
The trial court reasoned that the warden’s access to the property was abnormal and did not diminish the defendant’s intent to exclude people from coming onto the property. The trial court granted the defendant’s motion to suppress evidence obtained by the warden during the warrantless search. On appeal, the state Supreme Court affirmed. The State claimed that the defendant did not properly exclude the public and, therefore, did not have an expectation of privacy relating to the regulation of hunting. However, the Supreme Court held that when a landowner objectively demonstrates an intent to maintain privacy of open fields, a search warrant is required. Game wardens must obtain a search warrant, the court determined, whenever a warden seeks to enter property and gather evidence. The defendant’s posting of “No Trespassing” signs created an expectation of privacy. Accordingly, the evidenced obtained in the warrantless search was properly suppressed.
Conclusion
The Vermont case points out that posting property as “No Trespassing” can, indeed, have its benefits. Also, it’s important to check state law requirements for the type, size, placement and content of signs. State rules vary and they must be complied with to properly post your property. Just another thing to think about in the world of agricultural law.
September 14, 2018 in Civil Liabilities, Criminal Liabilities | Permalink | Comments (0)
Friday, July 20, 2018
Establishing the Elements of a Cruelty to Animals Charge
Overview
Many states criminalize the intentional killing, injuring, maiming, torturing or mutilating of any animal. In some states, simply abandoning or leaving an animal in any place without making provisions for its proper care or having physical custody of an animal and failing to provide food, potable water, protection from the elements, opportunity for exercise and other care, as is needed for the health or well-being of the animal is criminal.
But, what must the state prove to make a cruelty to animals charge stick? That issue came up in a recent case and is the topic of today’s post.
Common Elements
Typically, the state must prove that the defendant acted with depraved intent. Cruelty to animals is typically classified as a misdemeanor carrying a penalty of up to six months in jail and/or a fine of up to $2,000. Most states do not classify as cruelty to animals accepted veterinary practices and bona fide experiments carried on by commonly recognized research facilities. In many of the western states, rodeo practices accepted by the Rodeo Cowboy's Association are statutorily determined not to constitute cruelty to animals as well as the humane killing of an animal which is diseased or disabled beyond recovery for any useful purpose or for population control by the animal's owner. Normal or accepted practices of animal husbandry do not constitute cruelty to animals with respect to farm animals, and killing an animal that is found injuring or posing a threat to another person, farm animal or property is also permitted.
Recent Case
In Cadwell v. State, No. 06-17-00227-CR 2018 Tex. App. LEXIS 4545 (Tex. Ct. App. Jun. 21, 2018), the defendant and his estranged wife were involved in divorce proceedings and during that time various horses belonging to them that had been ordered into the defendant’s custody lost weight, reportedly due to inadequate nutrition. The defendant’s estranged wife as well as two other investigators and animal control officers all testified that the horses were in very bad condition with ribs showing and cracked and had split hooves due to malnutrition. The investigator testified that the horses were kept in an enclosure that had “virtually no grass,” and that grass that was present was too short for them to eat. All the bushes and shrubs had been picked clean. The water troughs within that enclosure were empty and had only leaves and debris in them or had been overturned. A stock tank or pond had water, but it was filled with debris and was stagnant. In addition, there was no evidence of hay found in the horses’ enclosure. The state’s expert witness was a veterinarian with 11 years’ experience. She explained that there is a body scoring scale from one (extremely emaciated) to nine or ten (being extremely obese). In addition, she explained that the acceptable range for a horse is four to six. A horse that is scored under four is in a condition that needs to be addressed. A horse scored at three on this scale is considered thin, while a score of two would indicated that a horse is badly emaciated but standing, while a one indicates extreme emaciation, not able to stand, and not considered savable. She testified that when she saw them the majority of the horses were scored at a three. She also testified that she was surprised with the relatively low parasite presence in most of them and concluded that the most likely reason for the horses’ thinness was that they were not being fed properly.
Ultimately, the defendant was convicted of cruelty to livestock animals and sentenced to 180 days in jail (which was changed to 24 months on the condition that the defendant serve 30 days in jail). The defendant appealed on the basis that there the state failed to prove that he had the criminal intent (mens rea) to harm the animals. The appellate court determined that evidence could lead a rational jury to find beyond a reasonable doubt that the defendant was intentional or knowing in not providing one or more of the horses in his care enough nutrition.
The defendant also claimed that by inserting “by neglect” in the information and the jury charge, the State and the trial court, improperly instructed the jury and improperly lowered the mens rea requirement from intentionally or knowingly to a lower level of mens rea. However, the appellate court determined that the phrase “by neglect” charges the defendant with cruelty to animals by the manner and means of failure to act or of behavior that was not attentive to the needs of the horses, not with negligently doing so, especially given that the mens rea was specified in both the information and in the jury charge as intentional or knowing. Thus, the appellate court held that because the use of the phrase “by neglect” set out the manner and means of committing the offense and because the information and the jury charge clearly set out the required mens rea of intentional or knowing behavior by the defendant, the use of the phrase did not improperly reduce the State’s burden to prove the defendant’s willful or knowing mens rea.
Conclusion
Generally accepted farming practices do not constitute animal cruelty. Generally, providing adequate food and shelter is required, but some states have little to no shelter requirements in certain situations and with respect to certain types of livestock. The statutory rules vary from state to state.
July 20, 2018 in Criminal Liabilities | Permalink | Comments (0)
