Sunday, May 16, 2021

Intergenerational Transfer of Family Businesses with Split-Dollar Life Insurance

Overview

Last week, the U.S. Tax Court, in Morrissette v. Comr., T.C. Memo. 2021-60, decided a case involving an intergenerational transfer of a closely-held family business and the “split-dollar” life insurance technique.  There are some good “take-home” points from the case that show how the use of the technique can work in a complicated estate plan involving a family business where the intent is to keep the business in the family for multiple generations.

Estate Planning with the split-dollar life insurance technique – it’s the topic of today’s post.

Split-Dollar (In General)

In general, a split-dollar life insurance plans exists when two persons enter into an agreement to share both the premiums due and the proceeds receivable on a whole life policy.  See, e.g., Treas. Reg. 1.61-22(B)(1).  This is usually accomplished is by an employer entity splitting premiums and proceeds with an employee.  The employee either pays premiums for his portion (via a loan from the employer) based on the one-year cost of term insurance or pays income tax on the employer’s payment of such amount.  See Rev. Rul. 64-328, 1964-2 C.B. 11.  The advantage is that the employee is responsible for only the cost of pure life insurance protection.  That cost is either determined by the PS58 Cost Table that is published in Rev. Rul. 55-747, 1955-2 C.B. 228, or if it is less, by the insurance company’s premium tables for one-year term insurance of standard risks.  Rev. Rul. 66-110, 1966-1 C.B. 12.   Often, the employee has the option to continue the policy when the agreement terminates.  If the employee dies, the named beneficiary receives a tax-advantaged death benefit.   

The split-dollar technique is sometimes used by large estates in an attempt to minimize taxes at death, often in conjunction with an irrevocable life insurance trust (ILIT).  It can also be used as a funding mechanism for a buy-sell agreement in a closely-held family business where the goal is to maintain family ownership of the business over multiple generations.  But split-dollar arrangements are heavily regulated and specific rules must be followed precisely. 

The Morrissette Estate Plan

Arthur Morrissette founded International Moving Company (Interstate Van Lines) in 1943. He and his wife established revocable trusts in 1994 and funded the trusts, at least in part, with company stock.  The trusts directed that the company stock pass to qualified subchapter S trusts (QSSTs) for the benefit of their sons, and then to trusts for the benefit of their grandchildren. 

After Arthur’s death, his surviving spouse established a plan to secure the funds to pay the estate taxes imposed on the stock passing via the QSST trusts to her sons and grandchildren. She first created three” dynasty” insurance trusts (irrevocable life insurance trusts (ILITs)) – one for each of her sons and their families.  The ILITs and the sons entered into shareholder agreements which set forth arrangements whereby the ILITs would purchase the stock held by a son’s QSST upon the son’s death.   To fund the buyouts, each ILIT secured a life insurance policy on the lives of the two other sons via a cross-purchase buy-sell arrangement.  Ultimately, the three ILITs purchased a total of six policies.

The surviving spouse arranged to pay all the premiums for the policies in lump sums out of her revocable trust. The lump-sum amounts that she advanced to pay premiums on the policies were designed to be sufficient to maintain the policies for her sons' projected life expectancies (which at the time ranged from approximately 15 to 19 years).  The ILITs would ultimately acquire the stock of QSST trusts for the benefit of her grandchildren and subsequent generations, and were designed to not be subject to federal estate tax.

The surviving spouse advanced approximately $29.9 million to make lump sum premium payments on policies insuring the lives of her three sons. The financing for these life insurance policies was structured as “split-dollar arrangements,” meaning that the cost and benefits would be split between the trusts. When she paid a lump sum amount to cover the premiums on the policies, the policies themselves were designed to pay out varying amounts to the trusts for both herself and her sons.

Specifically, upon the death of each of her sons, her revocable trust would receive (attributable to her “split-dollar receivables”) the greater of either (i) the cash surrender value of that policy, or (ii) the aggregate premium payments on that policy. Each ILIT would receive the balance of the policy death benefit.  Such arrangements are commonly structured so that the company advances funds to an ILIT to pay premiums on insurance on the life of the owner of the company, and the split-dollar receivable is payable upon the death of that owner. However, the surviving spouse’s plan was structured such that the receivable wasn’t payable until the death of one of the sons. Also, the company did not own the split-dollar receivable and it would become an asset of her taxable estate.  Given her sons’ life expectancies, the estate was not likely to collect the amounts payable with respect to the split-dollar receivables for 15 to 19 years.

From 2006 until her death in 2009, the surviving spouse made (and reported) gifts to the ILITs out of her revocable trust based upon the cost of the current life insurance protection in accordance with the IRS tables corresponding to the “economic benefit regime.” The total amount of the gifts was $29.9 million, but the economic benefit of the gifts was far less than that.  Accordingly, the surviving spouse reported the payment of the premiums as gifts to her sons for gift tax purposes to the extent of the economic benefit specified by Treas. Reg. §1.61-22. 

IRS gift tax challenge. 

The IRS issued two Notices of Deficiency to the estate. One Notice determined a gift tax liability for the tax year ending December 31, 2006, which concluded the surviving spouse’s estate had failed to report total gifts in the amount that the surviving spouse’s revocable trust advanced to the ILITs to make lump-sum payments of policy premiums. The second Notice grossed-up the surviving spouse’s lifetime gifts by the $29.9 million gifted to the ILITs.  

The surviving spouse’s estate moved for partial summary judgment on the threshold legal question of whether the split-dollar arrangements should be governed under the economic benefit regime of Treas. Reg. §1.61-22.  If so, the surviving spouse didn’t make any significant gift in 2006, and the total value reported for the split-dollar receivables should be based on the present value of the right to collect the split-dollar receivables in 15 to 19 years.  The IRS asserted that it was factually unclear as to whether or not the revocable trust had conferred upon the ILITs an economic benefit in addition to the current cost of life insurance protection.  The IRS claimed that the revocable trust’s lump-sum premium payments should be treated as loans owed back to the estate and valued under Treasury Regulations finalized in 2003 concerning how to treat split-dollar arrangements for tax purposes.  See Rev. Rul. 2003-105, 2003-2 C.B. 696.  The issue was, in essence, whether the 2003 regulations controlled the outcome, or whether the economic benefit regulation controlled.

Ultimately, the Tax Court disagreed with the IRS position. Estate of Morrissette, 146 T.C. 171 (2016).  The Tax Court held that the split-dollar agreements complied with the economic benefit regulation of Treas. Reg. § 1.61-(1)(ii)(A)(2), and that the surviving spouse made annual gifts only of the cost of current protection for gift tax purposes.  Under the regulation, only the economic benefit provided under the split-dollar life insurance arrangement to the donee is current life insurance protection.  As such, the donor is deemed owner of the life insurance contract, irrespective of actual policy ownership, and the economic benefit regime applies.  Thus, to determine if any additional economic benefit was conferred by the revocable trust to the ILITs, the Tax Court considered whether or not “the dynasty trusts [ILITs] had current access to the cash values of their respective policies under the split-dollar life insurance arrangements or whether any other economic benefit was provided.”  Because the split-dollar arrangements were carefully structured to only pay the ILITs that portion of the death benefit of the policy in excess of the receivables payable to the revocable trust, the Tax Court concluded that the ILITs could not have any current access under the final regulations. The Tax Court also determined that no additional economic benefit was conferred by the revocable trust to the dynasty trusts.  The valuation of the receivables at $7.48 represented an approximate 77 percent valuation discount from the value of the amount advanced to pay the premiums. 

IRS estate tax challenge.  The surviving spouse’s estate valued the receivables at $7.48 million.  The IRS disagreed with the estate’s valuation, claiming instead that the transfer of $29.9 million made by her revocable trust should be included in her estate at death by virtue of I.R.C. §2036 and I.R.C. §2038.  The Tax Court did not agree with the IRS position, determining that the transfers had valid non-tax purposes.  The evidence showed that the decedent desired to keep the business in the family, needed liquidity for estate tax purposes, and also wanted to provide a transition of the business to the next generation of the family while maintaining family harmony.  As such, the Tax Court concluded, the cash surrender value of the policies was not pulled back into the estate at death.  The Tax Court also held that I.R.C. §2703 did not apply because the split-dollar agreements served a business purpose and were not simply a manner in which to transfer property for less than full and adequate consideration.  They were also comparable to arm’s length transactions.  However, the court held that the estate was liable for the 40 percent understatement penalty of I.R.C. §6662 because of an undervaluation of the decedent’s split-dollar rights to the life insurance policies. 

The Tax Court did not determine the estate’s federal estate tax value, but directed the parties to value of the rights associated with the split dollar arrangements based on cash surrender values, life expectancies and discount rates.  The Tax Court said that the split-dollar rights are the rights of the decedent’s trust to payment in exchange for paying the policy premiums.  That payment, the Tax Court said, is either the amount of premiums paid or the cash surrender values of the policies, whichever is greater.

Conclusion

The Tax Court’s 2016 decision is very helpful to high-net-worth individuals and owners of closely held businesses.  Similarly structured split-dollar arrangements will be governed by the economic benefit doctrine and protect from gift tax liability.  The result will be that the value of the split-dollar receivables would be determined based on typical valuation principles (i.e., the amount a third party would pay to purchase the split-dollar receivables).

Last week’s Tax Court decision that I.R.C. §2703(a) does not apply to the split-dollar receivables, because they were not subject to any restriction on the revocable trust’s rights to sell or use them opens the door to intergenerational split-dollar arrangements. 

These two Tax Court opinions, taken together, provide a blueprint for passing family assets (like closely held businesses such as a farm or ranch) throughout subsequent generations, with predictable (and favorable) estate and gift tax consequences for the original owners.  That is particularly important in light of the unfavorable changes the present Congress might make to the laws governing the transfer tax system.

May 16, 2021 in Business Planning, Estate Planning | Permalink | Comments (0)

Wednesday, May 12, 2021

The Revocable Trust – What Happens When the Grantor Dies?

Overview

My article last month on the use of the revocable trust in an estate plan generated many nice comments.  You can read that article here:  https://lawprofessors.typepad.com/agriculturallaw/2021/04/the-revocable-living-trust-is-it-for-you.html.  I also received several questions concerning what happens from an income tax standpoint when the grantor of the trust dies.  After answering those questions, I thought it might be a good idea to write an article on it for the blog.

What are the income tax impacts of a revocable trust when the grantor dies – it’s the topic of today’s post.

Income Tax Issues for the Year of Death

When the grantor of a revocable trust dies, the trust assets are not impacted.  The trust continues according to its terms and, as mentioned in last month’s article, the assets contained in the trust are not included in the decedent’s probate estate.  For income tax purposes, the trust is required to obtain a taxpayer identification number (TIN).  That’s the case even if the trust had obtained a TIN during the grantor’s lifetime.  Treas. Reg. §301.6109-1(3)(i)(A).    That means that the trustee will likely have to establish new accounts for the trust with banks and other financial institutions with which the trust does business.

For the year of the grantor’s death, all tax items must be allocated between the grantor and the trust for the pre-death and post-death periods.  This requires the trustee to establish some type of system to make sure that the proper amounts of income, loss, deduction, credit, etc., are allocated appropriately in accordance with the trust’s method of accounting. 

Returns and Reporting Issues

When the grantor of a revocable trust dies, the trust is no longer a grantor trust.  Thus, all tax-related activity of the trust that occurred before the grantor’s death during the year of death must be reported on the grantor’s final income tax return.  Upon the grantor’s death, the trust becomes a separate taxpayer (from the grantor’s estate) with a calendar year as its tax year.  I.R.C. §644(a).  Because of this separate taxpayer status, the grantor’s estate will also have to obtain a TIN and report tax items separately from those of the trust.   

Note:   If the terms of the trust require all of the trust income to be distributed annually but not trust corpus, the trust is a “simple” trust.  If not, the trust is a “complex” trust. 

Note:   The grantor’s estate can elect either a fiscal year or a calendar year for tax reporting purposes.  When a grantor dies late in the year, it may be beneficial for the executor of the grantor’s estate to elect a fiscal year.  That may provide some ability to use tax-deferral techniques for the estate or the beneficiaries and can allow the executor more time to deal with administrative duties concerning the estate. 

One technique that can help simplify tax filings after the grantor dies is for the trustee to work with the administrator of the grantor’s estate in considering whether to make an I.R.C. §645 election.  The election can be used for certain revocable trusts, and has the effect of treating the trust as part of the decedent’s estate.  I have written about the I.R.C. §645 election here:  https://lawprofessors.typepad.com/agriculturallaw/2020/11/merging-a-revocable-trust-at-death-with-an-estate-tax-consequences.html.  To recap that article, the election can reduce the number of separate income tax returns that will have to be filed after the grantor’s death.  The irrevocable election is made via Form 8855. 

A Sec. 645 election makes available several income tax advantages that would not otherwise be available in a separate trust tax filing.  I detailed those in my article linked above that I wrote last fall, but for our purposes here, while the election is in force (two years if no federal estate tax return is required to be filed; other deadlines apply if a Form 706 is required (See Treas. Reg. §1.645-1(f)) income and deductions are reported on a combined basis – all trust income and expense is reported on the estate’s income tax return.  The one exception is for distributable net income (DNI).  DNI is computed separately.  The combined reporting on the estate’s income tax return might be on a fiscal year instead of the calendar year-end that is required for trusts. 

When the election period terminates, the “electing trust” is deemed to be distributed to a new trust.  That’s a key point to understand.  The new trust must use the calendar year for reporting purposes.  As a result, the trust beneficiaries might receive two Schedule K-1s if the co-electing estate files on a fiscal year. 

If the decedent’s estate was large enough to require the filing of Form 706, the assets in the revocable trust are aggregated and reported on Schedule G.  They are not listed separately.  Part 4 should be answered, “yes.”  In addition, a verified copy of the trust should be attached to Form 706. 

Complexity of Farm Estates

A decedent’s estate is a separate entity for income tax purposes.  In general, an estate’s net income, less deductions for the value of property distributed to heirs, is taxed to the estate.  The distributions are taxed to the heirs in the calendar year which includes the last day of the estate fiscal year during which the distributions were made.  When these principles are applied to the unique aspects of a farmer’s estate, problems (and opportunities) arise.  A farmer’s estate has numerous attributes that require specialized application of the general principles of estate income taxation.  Those include the seasonal nature of the business with bunching of income and expense in different times of the year; a complex mix of land and depreciable property that is subject to recapture; inventory; common use of income tax deferral due techniques; the problem of establishing income tax basis in property; determining accurate property inventories; and unique capital gain holding periods for certain assets.

Conclusion

A revocable trust is a common and often beneficial part of the estate plan of a farmer or rancher.  But, understanding the tax issues when the trust grantor dies is important.  Likewise, fitting the tax aspects a revocable trust that are triggered by the grantor’s death with the overall complexity of an agricultural estate is crucial.    

May 12, 2021 in Estate Planning, Income Tax | Permalink | Comments (0)

Monday, May 10, 2021

The “Mis” STEP Act – What it Means To Your Estate and Income Tax Plan

Overview

In late March, a group of five Democrat Senators from northeastern states introduced the “Sensible Taxation and Equity Promotion (STEP) Act.  Similar legislation has been introduced into the U.S. House, also from an East Coast Democrat.  These bills, combined with S.994 that I wrote about last time, would make vast changes to the federal estate and gift tax system, have a monumental impact on estate planning for many – including farm and ranch families – and would also make significant income tax changes.  The STEP Act also has a retroactive effective date of January 1, 2021. That makes planning to avoid the impacts next to impossible.  Today’s focus will be on the provisions of the STEP Act.

The key components of the STEP Act and its impacts and planning implications – it’s the topic of today’s post.

Income Tax Provisions

Before addressing the STEP Act’s provisions, it’s important to remember other proposals that are on the table.  Those include an income tax rate increase on taxable income exceeding $400,000 (actually about $450,000) by setting the rate at 39.6 percent.  Also, for these taxpayers, the itemized deduction tax benefit is capped at 28 percent.  That makes deductions less valuable.  In addition, the PEASE limitation of three percent would be restored.  This limitation reduces itemized deductions by three percent of adjusted gross income (AGI) over a threshold, up to 80 percent of itemized deductions.  Also, proposed is a phase-out of the qualified business income deduction (QBID) of I.R.C. §199A.  The phaseout of the QBID would impact many taxpayers with AGI less than $400,000. 

Capital Gains 

The STEP Act is largely concerned with capital gains and trusts.  The STEP Act applies the 39.6 percent rate to capital gains exceeding $1,000,000. Passive gains exceeding this threshold would be taxed at 43.4 percent after adding in the additional 3.8 percent net investment income tax of I.R.C. §1411 created by Obamacare.  An additional $500,000 exclusion is provided for the transfer of a personal residence ($250,000 for a taxpayer with single filing status).  Also, outright charitable donations of appreciated property are excluded, but (apparently) not transfers to charitable trusts), and some assets held in retirement accounts.

From an estate planning standpoint, if this provision were to become law a “lock-in” effect would occur to some extent – taxpayers would simply hold assets until death to receive the basis adjustment at death equal to the asset’s fair market value (I.R.C. §1014).  Unless, of course, the “stepped-up” basis rule is eliminated. 

Note:   Planning strategies such as charitable remainder trusts (maybe), appropriate timing of the harvesting of gains and losses and similar techniques can be used to keep income under the $1 million threshold.  Also, especially for high-income taxpayers residing in states with relatively high income tax rates, a tax minimization strategy has been the use of the incomplete non-grantor trust (ING).  An ING is a self-settled, asset protection trust that allows a grantor to fund the trust without incurring gift tax while also achieving non-grantor status for income tax purposes.  The typical structures is to establish the trust is a state without an income tax with the grantor funding the ING with appreciated assets having a low basis. The ultimate sale of the trust assets thereby avoids state income tax.  The IRS has announced that it is studying INGs and will not issue any further rulings concerning them.  Rev. Proc. 2021-3, 2021-1, IRB 140, Sec. 5.

Trusts 

The Step Act also proposes new I.R.C. §1261 which, under certain circumstances, imposes income recognition on gains at the time an asset is transferred to a trust.  Under this provision, gain recognition occurs at the time of a transfer to a non-grantor trust, as well as a grantor trust if the trust assets (corpus) will not be included in the grantor’s estate.  If the corpus will be included in the grantor’s estate at death, there apparently is no gain until a triggering event occurs.  Proposed I.R.C. §1261(b)(1)(A).  

Note:   The lack of clarity of the STEP Act’s language concerning transfers to grantor trusts creates confusion.  Seemingly the relinquishment of all retained powers under I.R.C. §2036 would mean that the trust corpus would not be included in the grantor’s estate, and the transfer to trust would be an income recognition event.  It simply is not clear what the STEP Act’s language, “would not be included” means. 

Apparently, a transfer to a non-grantor marital trust is not an income recognition event. Proposed I.R.C. §1261(c)(2).  Similarly, a transfer qualified disability trust or cemetery trust does not trigger gain recognition.  As noted above, the language is unclear whether a transfer in trust to a charity is excluded from recognition.  However, a transfer to a natural person that is other than the transferor’s spouse is taxed at the time of the transfer. 

Assets that are held in a non-grantor trust would be deemed to be sold every 21 years.  That will trigger gain to the extent of unrealized appreciation every 21 years, with the first of these “trigger dates” occurring in 2026. 

The STEP Act also requires annual reporting for trusts with more than $1 million of corpus or more than $20,000 of gross income.  The reporting requires providing the IRS with a balance sheet and an income statement, and a listing of the trustee(s), grantor(s) and beneficiaries of the trust. 

Note:   The built-in gain on an asset that is transferred during life either outright to a non-spouse or to a type of trust indicated above cannot be spread over 15 years.  However, the transfer of illiquid property (e.g., farmland) to a non-grantor trust that is not otherwise excluded is eligible for installment payments over 15 years, with interest only needing to be paid during the first five years.  If the tax on the appreciated value is caused by death, the tax can be paid over 15 years by virtue of I.R.C. §6166.

Grantor trusts – sales and swaps.  An important estate planning technique for higher wealth individuals in recent years designed to reduce potential estate tax involves the sale or gifting of assets to a grantor trust.  The goal of such a transaction is to make a completed transfer for federal estate and gift tax purposes, but retain enough powers so that the transfer is incomplete for income tax purposes.  This is the “intentionally defective grantor trust” (IDGT) technique. The result of structuring the transaction in this manner is that the future appreciation of the assets that are sold to the trust is removed from the grantor’s estate, and the grantor remains obligated for the annual income tax liability.  Of course, the trust could reimburse the grantor for that tax obligation.  Thus, the grantor ends up with a tax-free “gift” to the trustee of the trust’s income tax liability.  This allows the trust assets to grow without loss of value to pay taxes. 

The IRS blessed the IDGT technique in Rev. Rul. 85-13, 1985-1 C.B. 184.  In the Ruling, the IRs determined that the grantor’s sale of the asset to the trust did not trigger income tax – the grantor was simply “selling” to himself.  The irrevocable, completed nature of the transfer to the trust coupled with grantor trust status for income tax purposes is done by particular trust drafting language.  Also, that language can be drafted to allow the grantor to “swap” low basis assets in the trust with assets having a higher basis.  This allows the “swapped-out” asset to receive a basis increase at the time of the grantor’s death by virtue of inclusion in the grantor’s estate.  I.R.C. §1014

Under the STEP Act, a sale to a grantor trust might be treated as a transfer in trust.  If that is what the language means, then Rev. Rul. 85-13 is effectively repealed.  It also appears that swaps to a grantor trust would be treated that same as a sale.  If this is correct, IDGTs as a planning tool are eliminated. 

GRATs.  One popular estate planning technique for the higher-valued estates has been the use of a grantor-retained annuity trust (GRAT). With this approach, the grantor transfers assets to a trust in return for an annuity. As the trust assets grow in value, any value above the specified annuity amount benefits the grantor’s heir(s) without being subject to federal gift tax.  However, under the STEP Act, a transfer to a grantor trust is taxable if all of the transferred assets are not included in the grantor’s estate.  But, if all of the assets transferred to a grantor trust are included in the grantor’s estate, the transfer to the trust is not a taxable event.

This language raises a couple of questions.  One of the characteristics of a GRAT is that it can be drafted to make a portion taxable.  In that case, it is not completely includible in a decedent’s estate.  Likewise, if property is transferred into a GRAT and the transferor dies during the GRAT’s term and the I.R.C. §7520 rate rises, then less than all of the corpus of the GRAT is included in the decedent’s estate. See Treas. Reg. §20.2036-1, et seq.  This would appear to mean that, under the STEP Act, the transfer to the GRAT would be a taxable event.  It is also unclear whether the use of a disclaimer in the context of a GRAT will eliminate this potential problem. 

Estate Tax Deduction

Income taxes that the STEP Act triggers would be deductible at death as an offset against any estate tax that is due on account of the taxpayer’s death. 

The Constitutional Issue

As noted above, the STEP Act carries a general effective date of January 1, 2021.  It is retroactive.  If that retroactive provision were to hold, many (if not all) planning options that could presently be utilized will be foreclosed.  But is a retroactive tax provision constitutional? 

To be legal, a retroactive tax law change can satisfy the constitutional due process requirement if it is rationally related to a legitimate purpose of government.  Given the enormous amount of spending that the Congress engaged in during 2020 to deal with the economic chaos caused by various state governors shuttering businesses, a "legitimate purpose" could be couched in terms of the “need” to raise revenue.  See, e.g., Pension Benefit Guaranty Corporation v. R.A. Gray & Co., 467 U.S. 717 (1984)United States v. Carlton, 512 U.S. 26 (1994); In re Fifield, No. 04-10867, 2005 Bankr. LEXIS 1210 (Bankr. D. Vt. Jun. 20, 2005).  That’s the case even though historic data indicate that government revenues rarely increase in the long-term from tax increases – particularly the type of tax increases that are presently being proposed. 

Planning Steps

Will the STEP Act become law as proposed?  Probably not.  But, combined with S. 994 the two proposals offer dramatic changes to the rules surrounding income tax, as well as federal estate and gift tax.  With the proposal to basically double the capital gains tax rate, it could be a good idea to intentionally trigger what would be a gain under the STEP Act.  Doing so would at least remove those assets from the transferor’s estate.  In general, “harvesting” gains now before a 39.6 percent rate applies could be a good strategy.  Also, estate plans should be reexamined in light of the possible removal of the fair market value basis rule at death.  Consideration should be given to donating capital gain property to charity, setting up installment sales of property, utilizing the present like-kind exchange rules and making investments in qualified opportunity zones.   

Is all planning basically eliminated for 2021?  I don’t know.  There simply is no assurance whether transfers made to lock in the existing federal estate and gift tax exemption, utilize valuation discounts, etc., will work.  If the STEP Act is enacted, perhaps one strategy that will work would be to gift cash (by borrowing if necessary).  If the STEP Act is not enacted, then utilizing grantor trusts with sales and swaps could be an effective technique to deal with a much lower exemption.

One key to estate planning is to have flexibility.   The use of disclaimer language in wills and trusts is one way to provide flexibility.  Coupled with a rescission provision, disclaimer language included in documents governing transactions completed in 2021 might work…or might not.  It’s also possible that such a strategy could work for estate and gift tax purposes, but not for income tax purposes.

Another technique might be to set up an installment sale of assets to a marital trust for the spouse’s benefit that gives the spouse a power of appointment and entitles the spouse to lifetime income from the entire interest payable at least annually (basically a QTIP trust for the spouse (see I.R.C. §2523(e)).  The STEP Act indicates that such a transfer would not be a gain recognition event – marital trusts are excluded so long as the spouse is a U.S. citizen.  The surviving spouse would be given the power to appoint the entire interest and it could be exercised in favor of the surviving spouse or the estate of the surviving spouse.  No person other than the surviving spouse could have any power to appoint any part of the interest to any person other than the surviving spouse.  With a disclaimer provision the surviving spouse could disclaim all interest in the trust if the STEP Act is not enacted (or is enacted but becomes effective after the transfer by installment sale).  The disclaimer would then shift the assets into a trust for the surviving spouse’s heirs.  There are other techniques that could be combined with this approach to then add back the spouse.  If the STEP Act is enacted, the assets could remain in the marital trust and not trigger gain recognition.  The point is that the disclaimer adds tremendous flexibility (until disclaimers are eliminated – but the drafters of the STEP Act haven’t figured that out yet). 

Also, I haven’t even discussed the proposed American Families Plan yet.  On that one, Secretary Vilsack’s USDA put out an incredibly misleading press release titled, “The American Families Plan Honors America’s Family Farms.”  In it, the USDA claims that the proposed changes to the federal estate tax would apply to only two percent of farms and ranches.  That’s true as long as the family continues to own the farm and is materially participating in the farming operation.  What the USDA didn’t mention is that the American Families Plan eliminates many income tax deductions and will increase the federal income tax bill for practically all farmers and ranchers.

Conclusion

Presently, there is considerable uncertainty in the income tax and estate/business planning environment.  Also, the next shift in the political winds could wipe-out all of these proposed changes (if enacted) and the rules will swing back the other direction. 

There’s never a dull moment.  I can’t emphasize enough how important it is to attend (either in-person or online) this summer’s national conference on farm income tax and estate/business planning.  It’s imperative to get on top of these issues.  For more information on those conferences click here:  https://www.washburnlaw.edu/employers/cle/farmandranchtaxjune.html and here: https://www.washburnlaw.edu/employers/cle/farmandranchtaxaugust.html 

May 10, 2021 in Business Planning, Estate Planning, Income Tax | Permalink | Comments (0)

Friday, May 7, 2021

Planning for Changes to the Federal Estate and Gift Tax System

Overview

I have received many questions recently on what the Congress might do to the federal estate and gift tax laws and the planning steps, if any, that can be taken now to prepare for changes.  It’s an important questions that many have, particularly farm and ranch families.  It’s also a topic that I will spend a good deal of time on during the summer conferences in Ohio and Montana.  You can learn more about those conferences here:   https://www.washburnlaw.edu/employers/cle/farmandranchtaxjune.html  and https://www.washburnlaw.edu/employers/cle/farmandranchtaxaugust.html

What has been proposed?  Will it pass?  Will valuation discounts be eliminated?  What about the income tax basis rule at death – will it change?

The possible changing estate and gift tax (and income tax basis at death) landscape – it’s the topic of today’s post.

The Current Situation

The Tax Cuts and Jobs Act (TCJA) doubled the basic exclusion amount as well as the generation-skipping transfer tax (GSTT) exemption for years 2018-2025 to $10 million (in 2011 dollars).  Starting in 2026, the exemptions revert to pre-TCJA law - $5 million in 2011 dollars.  In other words, beginning in 2026, the exemptions will fall to $5 million but will be adjusted for inflation since then.  But will we get to 2026 without the current exemptions being reduced before then?  That’s a good question that depends entirely on politics.

What if the exemption decreases?  If the current Congress decreases the exemption, it’s important to understand the “math” behind the computation of a decrease.  Presently, the exemption equivalent of the unified credit for federal estate and gift tax purposes is $11.7 million.  It was $5.49 million in 2017, before TCJA increased it to $11.18 million in 2018.  One strategy to address a drop in the exemption might be to make gifts now while the exemption is at $11.7 million and use exemption to cover the taxes on the gifts.  However, the way the IRS views the $11.7 million exemption is in two separate pieces.  One piece is $5.85 million and represents the “old” exemption.  According to the IRS, gifts made in 2021 use this part of the current $11.7 million exemption first.  Then, for taxable gifts beyond $5.85 million in 2021, the other “piece” of the exemption (also equal to $5.85 million) is utilized.  This piece represents the 2018 exemption increase.  It is this piece that is lost if it is not used before the law changes that decreases the exemption.  This assumes, of course, that any reduction in the exemption would take effect after 2021.  A retroactive change would wipe out this planning strategy of making gifts now to use up the higher exemption. 

Proposed Legislation – S. 994 

Exemption and rates.  Earlier this year, Senator Bernie Sanders proposed the “For the 99.5% Act.”  S. 994.  The bill is currently in the Senate Finance Committee.  A similar proposal was proffered in 2019 but didn’t’ go anywhere.  Basically, the same proposal was made in the President’s final proposed budget in 2016.  The proposals all do essentially the same thing – set the federal gift tax exemption at $1 million without indexing for inflation; set the federal estate tax and GSTT exemption at $3.5 million; and retain portability of any unused exclusion amount.  S. 994, Sec. 2(b).  In terms of the tax rate structure, taxable estates exceeding $3.5 million up to $10 million would face a 45 percent rate.  Taxable estates over $10 million up to $50 million would be taxed at a 50 percent rate.  Those over $50 million but not over $1 trillion would be taxed at 55 percent, and those exceeding $1 trillion would be taxed at 65 percent.  If enacted in its present form, the effective date would be for deaths, GSTT transfers and gifts made after December 31, 2021.  S. 994, Sec. 2(c). 

Special use valuation.  For farms and ranches potentially subject to federal estate tax, electing special use valuation can be a viable estate tax planning technique if the elected land will be farmed by a family member (or members) for 10 years after the decedent dies.  I.R.C. §2023A.  For deaths in 2021, the maximum reduction in value of farmland subject to the election is $1.18 million.  The proposal is to increase that amount to $3 million, effective for deaths after 2021.  S. 994, Sec. 3. 

Conservation easement.  Under current law, land subject to a conservation easement can be excluded from estate tax up to $500,000 in value.  S. 994 increases that amount to $2 million.  It also increases the maximum percentage of the land which can be excluded from 40 percent to 60 percent.  S. 994, Sec. 4.  This provision would be effective for deaths and gifts after 2021.

Grantor trusts.  S. 994 eliminates the current income tax basis step-up rule at death for property contained in certain types of grantor trusts.  The provision applies to property held in a trust of which the transferor is considered to be the owner, and the property transferred to the trust is not included in the transferor’s gross estate at death.  S. 994, Sec. 5. 

Valuation discounts.  As for valuation discounts for such things as lack of marketability, minority interests, blockage, and built-in gain taxes, S.994 specifies that any assets of an entity that are not used in the active conduct of the trade or business that are transferred are to be valued as if the assets were transferred directly (i.e., non-actively traded interests).  Likewise, “passive assets” are not treated as used in the active conduct of a trade or business.  S. 994, Sec. 6.  In addition, no discount for minority interest is allowed if the transferee and family members have control or majority ownership (for non-actively traded interests).  Id.  These assets are to be valued as if the transferor had transferred the assets directly to the transferee.  Id. 

Excluded from the definition of non-business assets are inventory and real estate rental activities involving a real estate professional where the 750-hour requirement has been satisfied.  See, I.R.C. §469(c)(7).  There is also an exception for working capital.  Id.  A “look-through” rule also applies with respect to non-business assets.  This rule is designed to prevent any discount for non-business assets that are held in a lower-tier entity.  A 10 percent ownership interest threshold applies for this purpose.  If the rule applies, the upper-tier entity is treated as if it directly owns its ratable share of the lower-tier entity’s assets.  Id. 

As for minority discounts, S.994 disallows them when the transferor, transferee and family members together have either control or majority ownership after the transfer of entity interests.  “Member of the family” is defined in accordance with I.R.C. §2032A(e)(2).  There the definition includes an individual’s spouse and siblings, ancestors and descendants (including lineal descendants of the decedent’s spouse or parent of the decedent), spouses of descendants, and lineal descendants and spouses of the decedent’s spouse.  For these purposes, a legally adopted child of an individual is treated as blood relation. 

As a distinction from other parts of the legislation, the valuation rules would be effective upon date of enactment.  Id. 

Consider the following example illustrating the impact of eliminating (or severely restricting) valuation discounts:

Example:  Snarkfeltcher Valley Farms (SVF) is a closely-held family farming operation owned by family members.  The parents would like to transfer controlling interests to their son and daughter so that they can manage and control the family business after the parents retire and ultimately pass away.  Presently, SVF has a fair market value of $12 million.  With appropriate estate planning, upon the last of the parents to die with transfer of full operational control to the children, valuation discounts could be achieved.  Under current law, the federal estate tax would be computed as follows (assume that all of the assets are used in SVF’s trade or business):

            Gross Value:                                       $12,000,000

            Lack of marketability discount           $3,000,000

            Minority interest discount:                   $1,800,000

            Net taxable value:                                 $7,200,000

            Available exemption:                         $11,000,000

            Estate tax due:                                    $0

Now assume that S.994 becomes law and the transfer of control of SVF occurs after the law become effective.  Here’s how the federal estate tax would be computed:

Gross Value:                                       $12,000,000

Lack of marketability discount:         $3,000,000

            Minority interest discount:                 $0

            Net taxable value:                               $9,000,000

            Tentative estate tax:                            $3,795,800 ($1,320,800 + .45 x $5.5 mil.)

            Less available credit:                          $1.455,800 (credit that offsets first $3.5 mil.)

            Estate tax due:                                    $2,340,000

Grantor-retained annuity trusts.  An important business succession planning concept for some families is that of the grantor-retained annuity trust (GRAT).  A GRAT is a technique that can allow the grantor to “freeze” the value of the transferred assets while simultaneously providing the grantor with a cash flow stream for a specified time-period.  I have written about the use of the GRAT here:  https://lawprofessors.typepad.com/agriculturallaw/2018/09/farm-wealth-transfer-and-business-succession-the-grat.html

S. 994 essentially eliminates GRATs as a planning strategy by imposing a minimum 10-year term, and a maximum term tied to the life expectancy of the annuitant plus 10 years. In addition, the remainder interest must have a value (as determined at the time of the transfer) that is not less than an amount that is equal to the greater of 25 percent of the GRAT’s fair market value or $500,000, and not be greater than the fair market value of the property in the trust.  S. 994, Sec. 7.  These rules would be effective to transfer made after the date of enactment.  Id. 

Grantor trusts.  S. 994 also makes changes to the rules governing grantor trusts.  While assets in a grantor trusts are included in the grantor’s estate for federal tax purposes, distributions from grantor trusts during the grantor’s life are treated as taxable gifts.  S. 994, Sec. 8.  In addition, if at anytime during the life of the owner, the owner ceases to be treated as the owner of any of the trust assets, those assets are deemed to be a gift.  Id.  These changes would apply to trusts created after the date of enactment as well as to transfers made to pre-existing trusts after date of enactment and sales to pre-existing trusts.  Apparently existing grantor trusts would be grandfathered. 

GSTT.  The proposed legislation specifies that the inclusion ratio of any trust other than a qualifying trust is pegged at 1.  In addition, a qualifying trust must terminate not greater than 50 years after the trust is created.  Also, pre-existing trusts must terminate within 50 years of enactment.  S. 994, Sec. 9.  Also, S. 994 eliminates the GSTT exemption for certain long-term trusts.  Id. 

Gift tax rule changes.  S. 994 specifies that the first $10,000 of gifts made to a person during the calendar year are not to be included in the amount of gifts made during the year.  S. 994, Sec. 10.  The limit is $20,000 per donor.  The transfers subject to this limitation include transfers in trust, a transfer of an interest in a pass-through entity, a transfer of an interest subject to a prohibition on sale, and any other transfer of property that, without regard to withdrawal, put, or other such rights in the done, cannot immediately be liquidated by the donee.  S. 994, Sec. 10. 

Client Relations

Given these proposed changes in federal estate and gift tax law, how should practitioners advise clients?  For starters, the possible impacts on a client’s estate plan of the proposed changes should be discussed.  Perhaps a projection should be done of a client’s estate value particularly in light of the changes in the valuation discount rules.  Also, consideration should be made of the benefits of accelerating the funding of GRATs and other grantor trusts.  In that vein, sales to an intentionally defective grantor trust (IDGT) may also need to be accelerated.  I have discussed IDGTs here:  https://lawprofessors.typepad.com/agriculturallaw/2017/07/using-an-idgt-for-wealth-transfer-and-business-succession.html and here: https://lawprofessors.typepad.com/agriculturallaw/2018/08/intentionally-defective-grantor-trust-what-is-it-and-how-does-it-work.html

Also, give consideration to using the lifetime federal estate/gift tax exclusion prior to the law’s enactment (assuming that it does get enacted).  That also means being prepared to make taxable gifts.  Other thoughts should be given to the ordering rules surrounding the ordering rules for the deceased spouse unused exclusion (DSUE) amount. 

Conclusion

The proposed changes in the rules governing federal estate and gift tax are creating many questions and concern.  Knowing what the proposed changes might be is useful for purposes of evaluating the steps that can be taken to best handle the changes if they are enacted, and ensure that one’s estate/business planning goals can be achieved.  Again, I will spend a significant amount of time at the summer events in Ohio and Montana discussing these matters.  Don’t miss out.  Attendance online is also possible. 

May 7, 2021 in Business Planning, Estate Planning | Permalink | Comments (0)

Saturday, May 1, 2021

The Agricultural Law and Tax Report

Overview
 
Starting Monday May 3, I am hosting a daily 2-minute program, The Agricultural Law and Tax Report on farm radio stations nationwide and on SiriusXM 147.  The purpose of each report is to educate farmers and ranchers and rural landowners on the unique legal and tax issues that they are often faced with.  Each program explains what the law is on a particular topic, and how actual court cases and IRS rulings have been decided based on that law, and what the application is to a farming or ranching operation.
 
Topical Coverage
 
Some of the topics that I will address include:
 
Contract Issues - (auction sales; farm leases; hunting leases; grain and livestock sale contracts; types of clauses to protect the farmer-seller; remedies if there is a breach).
 
Ag Financing Issues - (collateral issues; rules governing lenders and farm borrowers; foreclosure issues and Farmers’ Home (FSA); redemption rights for farmland; agricultural liens).
 
Agricultural Bankruptcy - (Chapter 12 farm bankruptcy issues).
 
Farm Income Tax - (handling USDA/CCC loans; government payments; crop insurance proceeds; pre-paying expenses; deferred payment contracts; commodity trading income; easement payments; crop and livestock share rental income).
 
Real Property Issues - (fences and boundaries; buying and selling farmland; recoveries from settlements and court judgments (such as the Roundup litigation, etc.)).
 
Farm Estate Planning - (types of title ownership; disruption of family farm if there is no will or trust; planning approaches to facilitate keeping the farm in the family; federal estate tax planning; gifting of farm assets; treating off-farm and on-farm heirs fairly).
 
Liability Issues - (food product liability issues (labeling and disparagement laws); liability for trespassers and others on the property; trespassing dog laws; nuisance law; employer's responsibility for farm employees; animal diseases; fence laws).
 
Criminal Law Issues - (what can the government search without a warrant; cruelty to animal laws; government programs and criminal liability; environmental liability for farmers and ranchers).
 
Water Law Issues - (types of water law systems; use of surface water for crops and livestock; use of subsurface water; boundary disputes).
 
The initial sponsor is First State Bank headquartered in Lincoln, NE.  If you are interested in also becoming a sponsor, please let me know.
 
Many thanks to John Mellencamp and Sony Music Publishing Co. for the "bumper" music that accompanies each show. And...special thanks to Donn Teske.
 
Check with your local farm radio station to see if they are carrying The Agricultural Law and Tax Report. If not, please call your local station and request it, and let me know
 
My hope is that you find the show profitable for your farming business, rural practice, and your local rural community.

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)

Friday, April 30, 2021

Court Developments of Interest

Overview

Periodically on this blog, I summarize recent cases of interest to those involved in agriculture and tax practitioners in general.  Today is one of those days. 

Recent court developments of interest – it’s the topic of today’s post.

Defendant’s Removal of Trees Within Conservation Easement Not a Nuisance

Cergnul v. Bradfield, 2021 Ind. App. Unpub. LEXIS 295 (Ind. Ct. App. Apr. 9, 2021)

The developers of a subdivision agreed to record a conservation easement twenty feet wide along two boundaries of the subdivision after complaints by local farmers. The conservation easement’s purpose was to preserve the visual aesthetic for residents who enjoyed the rural setting. Although the restrictive covenants that were recorded did not reference the conservation easement, the developer recorded a final plat that explicitly referred to the conservation easement. The defendant purchased a lot in the subdivision and proceeded to remove some trees and brush from within the conservation easement. The defendant had reviewed the restrictive covenants, which had not been updated after the final plat was recorded. The defendant also had met with a representative of the subdivision’s homeowner’s association, who advised the defendant that he could clear the trees and brush so long as he did not change the grade of the land. The plaintiff was an adjoining neighbor outside the subdivision who sought damages for the loss of quiet enjoyment of his property.

The trial court found that the plaintiff lacked standing to challenge the activity within the conservation easement. Further, the trial court noted that the plaintiff failed to demonstrate that he had been denied a property right. On appeal, the plaintiff argued that although he lacked standing to enforce the conservation easement, he was entitled to damages to address a nuisance. The plaintiff noted that the developers had set aside a conservation easement pursuant to state law and that the defendant’s conduct amounted to nuisance per se. The appellate court noted that the conservation easement enabling statute did not provide the plaintiff with a private right of enforcement. Alternatively, the plaintiff argued that the defendant’s conduct created a nuisance per accidens as the right to the quiet enjoyment of his property had been destroyed. The appellate court noted that whether the defendant’s conduct qualified as a nuisance per accidens depended on whether his conduct would cause actual physical discomfort to a person of ordinary sensibilities. The appellate court found that the plaintiff failed to show any such evidence, and as a result, affirmed the trial court’s decision and denied the nuisance damages sought by the plaintiff. 

No Attorney-Client Privilege For Communications Between Trustee and Attorney

In re Estate of McAleer, No. 6 WAP 2019, 2021 Pa. LEXIS 1524 (Pa. Sup. Ct. Apr. 7, 2021)

The decedent created a revocable trust and named his son as the sole trustee. The trust named the son and his two step-brothers as beneficiaries. In 2014, the trustee filed a first and partial accounting of the trust. A step-brother objected and the trustee hired two separate law firms to respond to the step-brother’s objections. After an evidentiary hearing, the probate court dismissed the objections. During the court process, additional filings indicated that about $124,000 of trust funds had been expended from the trust for attorney’s fees and costs through 2015. The step-brothers then filed a petition to determine the reasonableness of the fees. In early 2016, the trustee filed a second and final accounting to which the step-brothers also objected. The trustee claimed that he had no obligation to provide the step-brothers with copies of billing invoices because they were protected by attorney-client privilege. The probate court disagreed and ordered the trustee to forward the unredacted invoices to the step-brothers withing 30 days. The trustee disclosed the invoices, but filed an interlocutory appeal on the issue of the attorney invoices.

The state Supreme Court upheld the probate court’s ruling, noting that the assertion of privilege requires sufficient facts be established to show that the privilege has been properly invoked. According to the state Supreme Court, the trustee had not established those facts. The state Supreme Court also held that the privilege didn’t apply because the interests the privilege protected conflicted with “weightier obligations” – the fiduciary duty of the trustee to provide information to the beneficiaries outweighed the privilege. This was especially the case because the attorney fees were paid from the trust.

Will Authorized Court To Review Sale/Transfer of Farmland

In re Estate of Burge, No. 19-1881, 2021 Iowa App. LEXIS 214 (Iowa Ct. App. Mar. 17, 2021)

The decedent left her estate to her three children and six grandchildren. Two of her children sought to probate the will as executors. One of the executors died shortly after, and his wife participated in the proceedings as the executor and sole beneficiary of his estate. The will distributed a lump sum to the now deceased son if he “is surviving on the death of the survivor” of the decedent. The will distributed half of the remainder to the three children in equal shares and the other half to the six grandchildren in equal shares. The decedent’s will also granted four grandchildren an option to purchase all of her farmland. If they chose to exercise this option, the will directed them to pay a penalty if they sold the farmland within 15 years. The will also had a provision that offered one of the decedent’s children, the remaining executor, to receive his share of the estate in farmland, provided that he could agree upon a division with the grandchildren. Both the grandchildren and the executor exercised their option to purchase the farmland.

The first proposed contract filed by the executor to purchase the farmland was rejected by the trial court because some of the beneficiaries did not participate in negotiations or agree to the terms. The executor filed a second proposed contract to transfer the decedent’s farmland to himself and the four grandchildren. The trial court approved this contract but included direction that if the executor continued with the exercise of his option, he would not be entitled to his residuary share of the estate. Two of the four grandchildren and the executor appealed, and argued that the trial court should not have removed them as residue beneficiaries. The executor also argued that the trial court should have excluded his deceased brother’s wife as a beneficiary.

The appellate court held that since the deceased son survived the decedent, the deceased son’s wife was entitled to his share of the estate as the sole beneficiary. The two grandchildren argued that the executor had the sole right to sell the real estate without court oversight, because the will provided an unrestricted power of sale. The appellate court disagreed and noted that the decedent’s will contained numerous provisions on the sale in her will, namely that the court could resolve any dispute as to the reasonableness of the terms and conditions of the sale. The two grandchildren also argued that the first proposed contract was binding and that the trial court was bound to accept it without modification. The appellate court noted that the first proposed contract did not provide for the executor’s share of the farmland, and the farmland sale/transfer was subject to the terms and conditions in the will and court review for reasonableness.

FBAR Penalties Not Subject to “Full Payment” Rule

Mendu v. United States, No. 17-cv-738-T, 2021 U.S. Claims LEXIS 537 (Fed. Cl. Apr. 7 2021)

The plaintiff was assessed approximately $750,000 of “willful” Foreign Bank and Financial Account (FBAR) penalties. Such penalties can reach up to 50 percent of the highest account balance of the foreign account. He paid $1,000 of the penalty amount and then sued in the U.S. Court of Federal Claims under the Tucker Act to recover the $1,000 as an illegal exaction. The IRS counterclaimed, seeking the entire judgment of $750,000 plus interest. The plaintiff moved to dismiss his complaint on the basis that the court lacked jurisdiction over the illegal exaction claim on the basis of Flora v. United States, 362 U.S. 145 (1960). Such dismissal would nullify the court’s jurisdiction over the counterclaim of the IRS. Under Flora, in accordance with 28 U.S.C. §1346(a)(1), a taxpayer seeking to file a federal tax claim in federal court (other than the U.S. Tax Court) must pay the full amount of the tax before filing suit. However, the plaintiff claimed that 28 U.S.C. §1346(a)(1) only applied to “internal revenue taxes” and claims related to “internal revenue laws.” The petitioner noted that Bedrosian v. United States, 912 F.3d 144 (3d Cir. 2018) hinted that FBAR penalties may fall within the reach of 28 U.S.C. §1346(a).

The court, in ruling for the plaintiff, flatly rejected the Bedrosian decision in holding that FBAR penalties are not subject to the Flora rule because they are not internal revenue laws or internal revenue taxes. The court noted that FBAR penalties are contained in Title 31 of the U.S. Code rather than Title 26 (the Internal Revenue Code), and that this placement was intentional. Title 31, the court noted, has as its purpose, the regulation of private behavior rather than the purpose of being a charge imposed for the purpose of raising general revenue. In addition, the court concluded that FBAR penalties are unlike civil penalties in that they contain no statutory cross-reference that equate “penalties” with “taxes.” The court also reasoned that the if the full payment rule didn’t apply to FBAR penalties there wouldn’t be any concern that the collection of FBAR penalties would be seriously impaired because they are enforced via a civil action to recover a civil penalty. That meant that there were no administrative collection procedures for FBAR penalties with which a partial payment illegal exaction claim would interfere. Thus, the court concluded that the Congress did not intend to subject FBAR penalty suits to the full payment rule. 

Conclusion

There’s always action in the courts and with the IRS.  That’s especially true this tax season which continues…

April 30, 2021 in Estate Planning, Income Tax, Real Property | Permalink | Comments (0)

Wednesday, April 28, 2021

Summer Conferences – NASBA Certification! (and Some Really Big Estate Planning Issues - Including Basis)

Overview

This summer Washburn Law School is sponsoring along with other co-sponsor two conferences on farm income tax and farm/ranch estate and business planning.  The conferences, while primarily directed to practitioners that advise farmers and ranchers, is also for agricultural producers and others interested in learning about tax and estate/business planning issues.  Now, Washburn Law School has been certified by the National Association of State Boards of Accountancy (NASBA) as a provider of continuing professional education (CPE).  That means that CPAs and accountants can receive CPE credit for attending online or in person.

Summer conferences – the topic of today’s post.

Ohio and Montana

The first summer conference is on June 7-8 at the Shawnee State Park Lodge and Conference Center near West Portsmouth, Ohio.  The second summer conference is slated for August 2-3 at the Hilton Garden Inn located in Missoula, MT. 

For more information, here is the link to the Ohio seminar:  https://www.washburnlaw.edu/employers/cle/farmandranchtaxjune.html.

The co-sponsors for the Ohio event are as follows:

The Wright and Moore Law Company of Delaware, OH; AgriLegacy; and BASE.   

You may learn more about each one here: 

https://www.ohiofarmlaw.com/

https://agrilegacy.com/

https://www.baseonline.com/

For more information about the Montana seminar, click on the following link:  https://www.washburnlaw.edu/employers/cle/farmandranchtaxaugust.html.

In addition to the sponsors of the Ohio seminar, an addition sponsor is the Budd-Falen Law Firm in Cheyenne, Wyoming.  More information about the firm can be found here:  https://buddfalen.com/.

Critical Issues for 2021 (and Potentially Beyond)

The political power advantage in Washington, D.C. is razor thin but proposed legislation, if it were to become law would make significant impacts on tax and estate planning for many farmers and ranchers.  The mindset of the current administration is generally opposed to people that work for themselves – such people can’t be as easily controlled.  That means that many in agriculture are in the crosshairs of policy. 

So what will we be talking about at the summer conferences?   A major emphasis will be on how to plan for proposed changes in the law, and how the changes will impact farming and ranching operations.   

Here’s just a few of the things we will address:

  • The current proposal to tax any transfer of property (after an exclusion amount) either during lifetime or at death that has a net gain associated with the transfer.  What are the implications of this for certain types of trusts?
  • The proposal to require all non-grantor trusts to report gain on appreciated assets contained in the trust every 21 years, and provide to the IRS a balance sheet, income statement and a list of the trustees, grantors and beneficiaries.
  • The impact of proposed legislation on installment payment of federal estate tax and special use valuation.
  • Potential changes in the level of the present interest annual exclusion and the establishment of a lifetime ceiling on gifts.
  • The proposed reduction in the federal estate tax applicable exclusion to an amount significantly less than the current $11.7 million amount, and an increase in the tax rate applicable to taxable estates.
  • The proposed change to the current “coupling” of the federal estate and gift tax systems.
  • The proposed elimination of “Dynasty Trusts” and “Intentionally Defective Grantor Trusts.”
  • The proposed changes to Grantor-Retained Annuity Trusts that would basically eliminate them as a planning concept.
  • The proposed elimination of valuation discounting as planning strategy.
  • The proposed increase in the capital gains tax rate
  • The proposed increase in the corporate tax rate

What About the Estate Tax and Income Tax Basis?

While it now looks as if the federal estate tax exemption will not be reduced, as I wrote here, https://lawprofessors.typepad.com/agriculturallaw/2021/02/what-now-part-two.html, the really big issue is income tax basis.  Currently, an asset that is included in a decedent’s estate at death for tax purposes receives an income tax basis in the hands of the heir(s) equal to the fair market value of the asset at the time of death.   I.R.C. §1014. This is commonly referred to as “stepped-up” basis.  Thus, if the heir were to sell the asset capital gains tax for the heir would be computed as the difference between the selling price of the asset and the value at the time of the heir inherited the asset.  For an asset that is sold shortly after inheritance, the capital gains tax is likely to be minimal to none. 

If the stepped-up basis rule were to be eliminated, the heir would receive the decedent’s income tax basis. For farmland that the decedent owned for many years, for example, that basis could be much lower than the date-of-death value.  That would be particularly the case if the decedent had received the farmland by gift, receiving the donor’s income tax basis in the farmland at the time of the gift.  The result would be heir’s being hit with large capital gains tax, or simply refusing to sell the land (if possible) and creating a “lock-in” effect with respect to certain assets.  

What would be particularly troubling is if the income tax basis rule were changed such that the appreciation in a property’s value would be taxed at the decedent’s death rather than waiting for the heir to sell the property. 

A change in the income tax basis rule would substantially impact estate and business planning.  This is particularly true with respect to farm and ranch estates where many assets have a low basis – either from being owned for many years or because of income tax planning strategies that have substantially diminished or eliminated the basis in assets.  Changing to a “carry-over” basis rule at death would also be an absolute nightmare for tax professionals.  That was certainly the case the last time a carry-over basis rule was tried during the Carter administration.  The protests from the practitioner community (and others) were so substantial that the Congress repealed the rule before it took effect.

Retroactivity

This basis issue will be a significant topic of discussion at the summer seminars.  What planning steps can be taken to plan to avoid this proposed rule change?  The answer to that question depends on whether the change in the rule will be retroactively effective.  If retroactive, then that will foreclose many (if not all) planning options that could be utilized now. 

To be legal, a retroactive tax law change can satisfy the constitutional due process requirement if it is rationally related to a legitimate purpose of government.  Given the enormous amount of spending that the Congress engaged in during 2020 to deal with the economic chaos, a "legitimate purpose" could be couched in terms of the “need” to raise revenue.  See, e.g., Pension Benefit Guaranty Corporation v. R.A. Gray & Co., 467 U.S. 717 (1984)United States v. Carlton, 512 U.S. 26 (1994); In re Fifield, No. 04-10867, 2005 Bankr. LEXIS 1210 (Bankr. D. Vt. Jun. 20, 2005).  That’s even though historic data indicate that government revenues don’t necessarily increase in the long-term from tax increases.

Conclusion

This is definitely the summer to attend one of these events.  The planning issues loom large.  The economic impacts of the proposed changes can be substantial and ripple throughout the entire economy.  In addition to income tax, these critically important estate planning issues will be unraveled and open for discussion at the summer seminars.  I encourage anyone interested in agriculture, sustainability and transition of the family farm and food production to attend – either online or in-person.  These will be vitally important conferences.  NASBA certification will allow those needing CPE to attend online and receive credit.  That’s a big plus!

April 28, 2021 in Estate Planning, Income Tax | Permalink | Comments (2)

Thursday, April 22, 2021

The Revocable Living Trust – Is it For You?

Overview

A common question that I receive from individuals interested in creating an estate plan is whether a trust should be a part of the plan.  More specifically, the question typically is whether a revocable living trust should be used.  That’s a difficult question to answer because there are many factors to consider when determining whether to include a revocable living trust as part of an estate plan.  Clearly, one valuable use of a revocable trust is to provide a management vehicle for property of older individuals at a time when they may not be capable of providing active management effort.  But are there others? 

A revocable living trust – what is it?  How does it work?  What are the pros and cons of utilizing it as part of an estate plan.  These matters are the focus of today post.

In General

The revocable trust can be valuable as a basic instrument in an estate plan for some persons, particularly where management of an individual's assets is needed.  The passage of property to one's beneficiaries at death requires the same detailed and careful planning as does the accumulation of the property during lifetime.  There is no legal device which will solve this problem on a "one size fits all" basis.  As with all estate planning tools available, the use of a revocable trust should be done only after a complete analysis of the individual's assets, stated desires and overall family goals.

The grantor creates the trust by executing a trust agreement and funds the trust by transferring property to the trust during life. Asset titles must be changed into the name of the trustee of the trust.  The grantor retains the power to amend, modify or revoke the trust.  Frequently, the grantor retains the right to receive the income for the grantor's life.

Estate and gift tax aspects.  Because the grantor reserves the power to revoke the trust, the transfer of property to the trust does not constitute a gift.  Treas. Reg. §25.2511-2(c).  However, whenever income or principal is applied to the benefit of a third party, the grantor may be deemed to have made a gift to the beneficiary.  Treas. Reg. §25.2511-2(f).  Subsequent termination of the power to revoke, other than by death, completes the gift for federal gift tax purposes.  Id.

Because of the powers the grantor retains over the trust, the property in the trust is subject to federal estate tax.  I.R.C. §§2036-2038.  See, e.g., Estate of Bell, 66 T.C. 729 (1976); Treas. Reg § 20-2038-1(a).  There is also a “three-year within death” rule that pulls some transfers that a decedent makes within three years of death.  Indeed, for deaths before August 6, 1997, the position of the courts had been that gifts of trust income or principal within three years of the grantor's death were included in the grantor's estate if the donees were potential trust beneficiaries.  I.R.C. § 2035(d)(2).  See also Estate of Collins v. United States, 94-1 U.S.T.C. ¶60,161 (E.D. Mich. 1994); Estate of Jalkut v. Commissioner, 96 T.C. 675 (1991), acq., 1991-2 C.B. 1. However, for deaths after August 5, 1997, any transfer from a grantor (e.g., revocable) trust is treated as a transfer by the grantor.  I.R.C. § 2035(e), added by TRA-97, Sec. 1310.

Claims against a decedent’s estate give rise to a deduction for the estate.  But, are those claims limited to the value of assets included in the decedent’s probate estate?  If so, then claims arising from assets in a decedent’s revocable trust would not create a deduction because the assets in the trust are not included in the decedent’s probate estate.  However, the U.S. Tax Court has held that a deduction for claims against the estate under I.R.C. § 2053 is not limited to the value of assets in probate estate.  Estate of Snyder v. United States, 99-2 U.S. Tax Cas. (CCH) ¶ 60,357 (Fed. Cl. 1999).  The Tax Court noted that the statute makes no distinction between probate and non-probate assets).

Income tax aspects.  A revocable living trust is disregarded as a taxable entity because it is treated as a "grantor trust" with all trust income taxable to the grantor.  I.R.C. § 676(a).  Form 1041 is required to be filed with a separate statement attached showing income, deductions and credits attributable to the grantor from the trust.  Treas. Reg. § 1.671-4.  But, if an individual is both the grantor and the trustee and all items of income, deduction and credit are treated as owned by the grantor, it is not necessary for the individual to file a Form 1041.  The information is reported on the grantor's individual return.  Treas. Reg. § 1.671-4(b).  Generally, the trust is to obtain a taxpayer identification number.  I.R.C. § 6109.  But, if the grantor is also the trustee and is treated as the owner of all assets held by the trust, there is no requirement to obtain a taxpayer identification number.  Treas. Reg. § 301.6109-1(a)(2).

Also, a qualified revocable trust may elect under I.R.C. §645 to be treated and taxed as part of an estate, and not as a separate trust, for all tax years of the estate ending after the date of the decedent’s death and before the applicable date that terminates the election period.  The applicable date for decedents dying on or after December 24, 2002, is set by Treas. Reg. §1.645-1(f)(2)(ii), effective on that date, where an estate tax return must be filed.  The IRS has announced that qualified revocable trusts for decedents dying before December 24, 2002, may use the Treas. Reg. §1.645-1(f)(2)(ii) dates if Form 1041, U.S. Income Tax Return for Estates and Trusts, has not been filed treating the Section 645 election period as terminated.  Notice 2003-33, C.B. 990.

Note:  Because transfers to a revocable living trusts rarely include all of the transferor’s assets, the plan often includes a "pour over will."  This will assures that property not needed in estate settlement for payment of debts and taxes would be transferred following estate settlement into the trust.

Other Particular Issues

The residence.  Transferring the principal residence to a revocable living trust does not make the residence ineligible for exclusion gain on sale under I.R.C. § 121, See Ltr. Rul. 8007050, Nov. 23, 1979.  The principal residence is eligible for the exclusion to the extent the owner is treated as the owner of the trust under I.R.C. §§ 671-677.  See, e.g., Priv. Ltr. Rul. 8239055 (Jun. 29, 1982).  But, the residence may be ineligible for preferential credit or exemption from property tax under state law.

Depreciation.  Expense method depreciation does not apply to trusts.  I.R.C. § 179(d)(4). But, the IRS acknowledges that this rule only applies to non-grantor trusts, such as irrevocable trusts.  Because a revocable trust is a grantor trust, property transferred to the trust that is eligible I.R.C. §179 property remains eligible.  Depreciation deductions, in general, are apportioned between the trustee and income beneficiaries as trust income is allocated.  Treas. Reg. §§ 1.611-1(c)(4)(1973), 1.167(h)-1(b).

Estate planning.  From an estate planning standpoint, the transfer of closely-held business assets to the trust could terminate installment payment of federal estate tax unless the transfer is merely a change in organizational form.  But, if that hurdle is cleared, property interests contained in the trust at death are not made ineligible for installment payment of federal estate tax simply by virtue of being held in trust.  See, e.g., Priv. Ltr. Rul. 7747007 (Aug. 19, 1977); Priv. Ltr. Rul. 8132027 (May 1, 1981); Priv. Ltr. Rul. 200529006 (Apr. 11, 2005).

Recapture of special use valuation (I.R.C. §2032A) benefits could occur unless all beneficiaries are qualified heirs and consent to personal liability for recapture tax.

Conveyance of joint tenancy property to a revocable living trust could result in a severance of the joint tenancy characteristic.  Black v. Commissioner, 765 F.2d 862 (9th Cir. 1985).  But the Tax Court has held that the transfer of jointly owned property to trust with retained right to jointly revoke transfer does not constitute severance, and §I.R.C. 2040 remains applicable to tax a decedent's estate to the extent of the decedent's proportionate contributions. Estate of May, T.C. Memo, 1978-20.

Pros and Cons of Revocable Living Trusts

There is a lot of information available about the supposed benefits of a revocable living trust.  Much of this information is peddled by those desiring to profit from the selling of the trust.  That doesn’t mean that the information is inaccurate.  It does mean that a person considering the use of a revocable trust needs to do their “homework” and discern carefully the information that is provided.

The following is a straightforward discussion of the go things and not-so-good things about a revocable trust with comparison to the probate process when a decedent dies with a will.

Probate avoidance.  Avoiding probate is a reason often cited for the use of a revocable trust.  But, what is "probate"?  The answer to that question is tied to state law.  Probate can be more complex, and costly, in some states as compared to others.  It is not costless to create a revocable trust, and it is not costless to administer a revocable trust at death.  There simply is no clear-cut answer as to whether a revocable trust is better than a properly drafted will from an economic standpoint.  However, probate is a public process and trust administration is not.  Privacy may be an important aspect of a trust that some place a high priority on.  But, the public nature of the probate process also puts in place a judge to administer the process, deal with creditor claims and handle disputes that might arise.  That administrative supervision is not there to the same degree with a trust. 

Estate tax savings.  Many times, the impression is erroneously given that a revocable trust is the only way to avoid estate taxes.  A revocable trust does not avoid more taxes associated with death than does a properly drafted will.  Avoiding probate by using a trust does not mean that taxes are avoided.  The tax results for an estate where the decedent has a revocable trust should be the same as for an estate where the decedent had a will.

Distribution of assets.  Assets are generally not tied up in probate for a long period of time.  With most state probate systems, assets are available to a personal representative five days following the decedent's death.  Any delay in distributing assets to the beneficiaries should be no greater in probate administration than when a revocable trust is used.  A trustee as well as a personal representative must make sure that the creditors are paid, taxes are computed and properly paid and all other distributions are proper.  Partial distributions can be made for those beneficiaries in need of assets.

Fees and costs. The cost of preparing and funding a revocable trust is greater than the cost of having a will prepared that accomplishes the same testamentary disposition.  Upon death, estate settlement costs are either hourly or a percentage of the estate.  The settlement process (administration of assets, payment of debts, tax filings and asset distributions) is virtually the same regardless of whether a trust or a will is used.  A bank, if named as trustee, will most likely have a settlement fee for closing a trust estate.  Fees for settling the estate through a trust, whether legal or administrative, just do not disappear.

Privacy.  As noted above, a revocable trust does maintain family privacy to some degree.  This is a desirable feature of the revocable trust to many people, although some limited disclosure must be made for inheritance tax purposes in states that have an inheritance tax.

Creditors rights.  Present and future creditors of the grantor can reach trust assets.  Transfers to a revocable trust to avoid creditors will not, typically, be allowed.  Probate proceedings statutorily provide for the elimination of some claims when the statutory notice provisions are followed.  However, in most instances, legitimate claims are allowed against the estate and probate should not be viewed as a method of avoiding all creditors.  The probate process, however, does provide an ability to terminate creditors' rights in the probate assets.

Note:  Assets held in a revocable trust that was created by a deceased spouse for the discretionary use and benefit of a surviving spouse can be counted as available resources (as can the income from the trust) for Medicaid eligibility purposes.  On the other hand, a trust created by the deceased spouse's will (a testamentary trust) for the benefit of the institutionalized spouse, if drafted property, may possibly not be treated as an available resource. 

Disinheriting a spouse.  While it has been possible in some states in the past, to my knowledge, no state remains where assets can be transferred to a revocable trust, with the grantor’s spouse not being named as a beneficiary, and effectively disinherit the spouse. The rights of a surviving spouse to a statutory elective share of a deceased spouse's property are not avoided by using a revocable trust rather than a Will.

Challenges.  Both revocable trusts and wills are susceptible to challenge by unhappy heirs.  Precedent is perhaps better established in the probate format.  A revocable trust may create greater suspicion on the part of the heirs.  This could mean that challenges are more likely in the context of a revocable trust as compared to a will administered through the probate process. 

Trust language interpretation.  There is a large body of caselaw that has developed around interpretation questions for wills.  This law does not automatically apply to the interpretation of a revocable trust when there may be uncertainty as to the actual intent of the grantor.  Even though the considerations might appear to be the same, that has not always been the case when applied by the Courts.

Conclusion

A revocable trust is clearly not advised for everyone.  Each person has unique goals and needs that must be considered in light of the benefits and burdens inherent in any type of estate planning arrangement that might be utilized.  There is no legal device which will make the basic personal decisions which must be faced for constructive estate planning, and there is no substitute for good counseling in the preparation and implementation of one's estate plan.

April 22, 2021 in Estate Planning | 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

https://lawprofessors.typepad.com/agriculturallaw/2016/08/treasury-attacks-estate-and-entity-planning-techniques-with-proposed-valuation-regulations.html

Using an LLC to Reduce S.E Tax and the NIIT

https://lawprofessors.typepad.com/agriculturallaw/2016/09/using-an-llc-to-reduce-se-tax-and-the-niit.html

IRS Audit Issue – S Corporation Reasonable Compensation

https://lawprofessors.typepad.com/agriculturallaw/2016/10/irs-audit-issue-s-corporation-reasonable-compensation.html

Rents Are Passive, But They Can Be Recharacterized - And Grouped (Sometimes)

https://lawprofessors.typepad.com/agriculturallaw/2016/11/rents-are-passive-but-they-can-be-recharacterized-and-grouped-sometimes.html

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

https://lawprofessors.typepad.com/agriculturallaw/2016/07/registration-of-a-pesticide-doesnt-mean-it-might-not-be-misbranded-.html

Death of Livestock In Blizzard Was a Covered Loss by “Drowning”

https://lawprofessors.typepad.com/agriculturallaw/2016/08/death-of-livestock-in-blizzard-was-a-covered-loss-by-drowning.html

FIFRA Pre-Emption of Pesticide Damage Claims

https://lawprofessors.typepad.com/agriculturallaw/2016/08/fifra-pre-emption-of-pesticide-damage-claims.html

Agritourism Acts, Zoning Issues and Landowner Liability

https://lawprofessors.typepad.com/agriculturallaw/2016/09/agritourism-acts-zoning-issues-and-landowner-liability.html

The “Agriculture” Exemption From The Requirement To Pay Overtime Wages

https://lawprofessors.typepad.com/agriculturallaw/2016/09/the-agriculture-exemption-from-the-requirement-to-pay-overtime-wages.html

The Scope and Effect of Equine Liability Acts

https://lawprofessors.typepad.com/agriculturallaw/2016/09/the-scope-and-effect-of-equine-liability-acts.html

What’s a Rural Landowner’s Responsibility Concerning Crops, Trees and Vegetation Near an Intersection?

https://lawprofessors.typepad.com/agriculturallaw/2016/12/whats-a-rural-landowners-responsibility-concerning-crops-trees-and-vegetation-near-an-intersection.html

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.

https://lawprofessors.typepad.com/agriculturallaw/2016/07/prison-sentences-upheld-for-egg-company-executives-even-though-government-conceded-they-had-no-knowledge-of-salmonella-contam.html

ENVIRONMENTAL LAW

Registration of a Pesticide Doesn't Mean It Might Not Be Misbranded

https://lawprofessors.typepad.com/agriculturallaw/2016/07/registration-of-a-pesticide-doesnt-mean-it-might-not-be-misbranded-.html

FIFRA Pre-Emption of Pesticide Damage Claims

https://lawprofessors.typepad.com/agriculturallaw/2016/08/fifra-pre-emption-of-pesticide-damage-claims.html

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?

https://lawprofessors.typepad.com/agriculturallaw/2016/12/are-seeds-coated-with-insecticides-exempt-from-fifra-regulation.html

ESTATE PLANNING

The Situs of a Trust Can Make a Tax Difference

https://lawprofessors.typepad.com/agriculturallaw/2016/07/the-situs-of-a-trust-can-make-a-tax-difference.html

Treasury Attacks Estate and Entity Planning Techniques With Proposed Valuation Regulations

https://lawprofessors.typepad.com/agriculturallaw/2016/08/treasury-attacks-estate-and-entity-planning-techniques-with-proposed-valuation-regulations.html

Common Estate Planning Mistakes of Farmers

https://lawprofessors.typepad.com/agriculturallaw/2016/09/common-estate-planning-mistakes-of-farmers.html

Staying on the Farm With the Help of In-Home Care

https://lawprofessors.typepad.com/agriculturallaw/2016/10/staying-on-the-farm-with-the-help-of-in-home-care.html

Including Property in the Gross Estate to Get a Basis Step-Up

https://lawprofessors.typepad.com/agriculturallaw/2016/10/including-property-in-the-gross-estate-to-get-a-basis-step-up.html

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

https://lawprofessors.typepad.com/agriculturallaw/2016/11/the-future-of-the-federal-estate-tax-and-implications-for-estate-planning.html

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

https://lawprofessors.typepad.com/agriculturallaw/2016/07/house-ways-and-means-committee-has-a-blueprint-for-tax-proposals-implications-for-agriculture.html

In Attempt To Deny Oil and Gas-Related Deductions, IRS Reads Language Into the Code That Isn’t There – Tax Court Not Biting

https://lawprofessors.typepad.com/agriculturallaw/2016/07/in-attempt-to-deny-oil-and-gas-related-deductions-irs-reads-language-into-the-code-that-isnt-there-tax-court-not-biti.html

IRS Does Double-Back Layout on Self-Employment Tax

https://lawprofessors.typepad.com/agriculturallaw/2016/08/irs-does-double-back-layout-on-self-employment-tax.html

S.E. Tax on Passive Investment Income; Election Out of Subchapter K Doesn’t Change Entity’s Nature; and IRS Can Change Its Mind

https://lawprofessors.typepad.com/agriculturallaw/2016/08/se-tax-on-passive-investment-income-election-out-of-subchapter-k-doesnt-change-entitys-nature-and-irs-can-change-it.html

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

https://lawprofessors.typepad.com/agriculturallaw/2016/08/proper-reporting-of-crop-insurance-proceeds.html

Permanent Conservation Easement Donation Opportunities and Perils

https://lawprofessors.typepad.com/agriculturallaw/2016/09/permanent-conservation-easement-donation-opportunities-and-perils.html

Sales By Farmers/Rural Landowners Generate Common Questions

https://lawprofessors.typepad.com/agriculturallaw/2016/09/sales-by-farmersrural-landowners-generate-common-questions-.html

Expense Method Depreciation - Great Tax Planning Opportunities On Amended Returns

https://lawprofessors.typepad.com/agriculturallaw/2016/09/expense-method-depreciation-great-tax-planning-opportunities-on-amended-returns.html

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

https://lawprofessors.typepad.com/agriculturallaw/2016/10/donating-food-inventory-to-a-qualified-charity-new-opportunity-for-farmers.html

Farm Valuation Issues

https://lawprofessors.typepad.com/agriculturallaw/2016/10/farm-valuation-issues.html

Treatment of Farming Casualty and Theft Losses

https://lawprofessors.typepad.com/agriculturallaw/2016/10/treatment-of-farming-casualty-and-theft-losses.html

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

https://lawprofessors.typepad.com/agriculturallaw/2016/11/selected-tax-issues-for-rural-landowners-associated-with-easement-payments.html

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)

https://lawprofessors.typepad.com/agriculturallaw/2016/11/rents-are-passive-but-they-can-be-recharacterized-and-grouped-sometimes.html

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

https://lawprofessors.typepad.com/agriculturallaw/2016/12/utilizing-the-home-sale-exclusion-when-selling-the-farm.html

Farmland Acquisition – Allocation of Value to Depreciable Items

https://lawprofessors.typepad.com/agriculturallaw/2016/12/farmland-acquisition-allocation-of-value-to-depreciable-items.html

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

https://lawprofessors.typepad.com/agriculturallaw/2016/12/irs-continues-unsuccessfully-attack-on-cash-accounting-by-farmers.html

The Uniform Capitalization Rules and Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2016/12/the-uniform-capitalization-rules-and-agriculture.html

The Non-Corporate Lessor Rule – A Potential Trap In Expense Method Depreciation

https://lawprofessors.typepad.com/agriculturallaw/2016/12/the-non-corporate-lessor-rule-a-potential-trap-in-expense-method-depreciation.html

REAL PROPERTY

Texas Mineral Estates, Groundwater Rights, Surface Usage and the “Accommodation Doctrine”

https://lawprofessors.typepad.com/agriculturallaw/2016/08/texas-mineral-estates-groundwater-rights-surface-usage-and-the-accommodation-doctrine.html

So You Want To Buy Farmland? Things to Consider

https://lawprofessors.typepad.com/agriculturallaw/2016/09/so-you-want-to-buy-farmland-things-to-consider.html

What’s the Character of the Gain From the Sale of Farm or Ranch Land?

https://lawprofessors.typepad.com/agriculturallaw/2016/09/whats-the-character-of-the-gain-from-the-sale-of-farm-or-ranch-land.html

Utilizing the Home Sale Exclusion When Selling the Farm

https://lawprofessors.typepad.com/agriculturallaw/2016/12/utilizing-the-home-sale-exclusion-when-selling-the-farm.html

REGULATORY LAW

New Food Safety Rules Soon to Apply to Farmers and Others In the Food Production Chain

https://lawprofessors.typepad.com/agriculturallaw/2016/10/new-food-safety-rules-soon-to-apply-to-farmers-and-others-in-the-food-production-chain.html

New Regulations on Marketing of Livestock and Poultry

https://lawprofessors.typepad.com/agriculturallaw/2016/11/new-regulations-on-marketing-of-livestock-and-poultry.html

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

https://lawprofessors.typepad.com/agriculturallaw/2016/11/verifying-employment-new-form-i-9-the-requirements-and-potential-problem-areas.html

SECURED TRANSACTIONS

Feedlot Has Superior Rights to Cattle Sale Proceeds

https://lawprofessors.typepad.com/agriculturallaw/2016/08/feedlot-has-superior-rights-to-cattle-sale-proceeds.html

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

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

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

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

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

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

Farm Financial Stress – Debt Restructuring

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

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

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

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

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

Agricultural Law in a Nutshell

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

The Business of Agriculture – Upcoming CLE Symposium

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

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

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

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

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

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

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

Are Taxes Dischargeable in Bankruptcy?

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

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

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

BUSINESS PLANNING

The Most Important Agricultural Law and Tax Developments of 2016

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

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

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

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

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

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

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

Divisive Reorganizations of Farming and Ranching Corporations

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

The Scope and Effect of the “Small Partnership Exception”

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

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

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

Employer-Provided Meals and Lodging

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

Self-Employment Tax on Farming Activity of Trusts

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

Minority Shareholder Oppression Case Raises Several Tax Questions

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

Farm Program Payment Limitations and Entity Planning – Part One

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

Farm Program Payment Limitations and Entity Planning – Part Two

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

Summer Ag Tax/Estate and Business Planning Conference

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

An Installment Sale as Part of an Estate Plan

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

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

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

The Business of Agriculture – Upcoming CLE Symposium

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

Forming a Farming/Ranching Corporation Tax-Free

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

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

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

New Partnership Audit Rules

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

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

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

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

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

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

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

Summer 2018 – Farm Tax and Farm Business Education

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

Partnerships and Tax Law – Details Matter

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

CIVIL LIABILITIES

The Most Important Agricultural Law and Tax Developments of 2016

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

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

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

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

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

Recreational Use Statutes – What is Covered?

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

Is Aesthetic Damage Enough to Make Out a Nuisance Claim?

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

Liability Associated with a Range of Fires and Controlled Burns

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

What’s My Liability for Spread of Animal Disease

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

Dicamba Spray-Drift Issues

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

Agricultural Law in a Nutshell

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

The Business of Agriculture – Upcoming CLE Symposium

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

Right-to-Farm Laws

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

CONTRACTS

The Most Important Agricultural Law and Tax Developments of 2016

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

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

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

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

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

Another Issue With Producing Livestock on Contract – Insurance

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

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

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

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

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

Agricultural Law in a Nutshell

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

The Business of Agriculture – Upcoming CLE Symposium

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

Ag Contracts and Express Warranties

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

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

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

COOPERATIVES

The Most Important Agricultural Law and Tax Developments of 2016

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

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

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

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

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

CRIMINAL LIABILITIES

The Necessity Defense to Criminal Liability

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

The Business of Agriculture – Upcoming CLE Symposium

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

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

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

ENVIRONMENTAL LAW

Drainage Activities on Farmland and the USDA

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

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

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

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

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

Spray Drift As Hazardous Waste?

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

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

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

The Prior Converted Cropland Exception From Clean Water Act Jurisdiction

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

Air Emission Reporting Requirement For Livestock Operations

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

ESTATE PLANNING

Rights of Refusal and the Rule Against Perpetuities

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

Some Thoughts On Long-Term Care Insurance

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

Overview of Gifting Rules and Strategies                                                                 

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

Disinheriting a Spouse – Can It Be Done?

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

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

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

Discounting IRAs for Income Tax Liability?

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

Special Use Valuation and Cash Leasing

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

Self-Employment Tax On Farming Activity Of Trusts

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

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

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

An Installment Sale as Part of An Estate Plan

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

Using An IDGT For Wealth Transfer and Business Succession

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

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

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

Estate Tax Portability – The Authority of the IRS To Audit

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

Digital Assets and Estate Planning       

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

INCOME TAX

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

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

The Home Office Deduction

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

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

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

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

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

Deductibility of Soil and Water Conservation Expenses

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

Should Purchased Livestock Be Depreciated or Inventoried?

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

The Changing Structure of Agricultural Production and…the IRS

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

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

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

Charitable Contributions Via Trust

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

Ag Tax Policy The Focus in D.C.

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

For Depreciation Purposes, What Does Placed in Service Mean?

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

Tax Treatment of Commodity Futures and Options

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

Discounting IRAs for Income Tax Liability?

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

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

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

Insights Into Handling IRS Disputes

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

Employer-Provided Meals and Lodging

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

Self-Employment Tax On Farming Activity Of Trusts

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

Minority Shareholder Oppression Case Raises Several Tax Questions

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

Input Costs – When Can a Deduction Be Claimed?

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

Like-Kind Exchange Issues

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

Tax Issues With Bad Debt Deductions

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

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

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

Tax Treatment of Cooperative Value-Added Payments

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

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

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

Timber Tax Issues – Part One

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

Timber Tax Issues – Part Two

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

An Installment Sale as Part of An Estate Plan

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

Using An IDGT For Wealth Transfer and Business Succession

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

Prospects for Tax Legislation

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

Deferred Payment Contracts

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

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

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

Substantiating Charitable Contributions

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

Forming a Farming/Ranching Corporation Tax-Free

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

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

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

Commodity Credit Corporation Loans and Elections

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

New Partnership Audit Rules

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

Alternatives to Like-Kind Exchanges of Farmland

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

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

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

Fall Tax Schools

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

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

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

Tax Treatment of Settlements and Court Judgments

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

The “Perpetuity” Requirement For Donated Easements

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

The Tax Rules Involving Prepaid Farm Expenses

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

It’s Just About Tax School Time

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

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

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

The Deductibility (Or Non-Deductibility) of Interest

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

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

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

The Broad Reach of the Wash-Sale Rule

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

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

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

Partnerships and Tax Law – Details Matter

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

Senate Clears Tax Bill - On To Conference

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

Are Taxes Dischargeable in Bankruptcy?

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

Bitcoin Fever and the Tax Man

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

House and Senate to Vote on Conference Tax Bill This Week

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

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

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

PUBLICATIONS

Agricultural Law in a Nutshell

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

REAL PROPERTY

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

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

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

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

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

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

Like-Kind Exchange Issues

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

Easements on Agricultural Land – Classification and Legal Issues

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

Should I Enter Into An Oil and Gas Lease?

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

REGULATORY LAW

Checkoffs, The Courts and Free Speech

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

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

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

Farmers, Ranchers and Government Administrative Agencies

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

IRS To Target “Hobby” Farmers

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

Drainage Activities on Farmland and the USDA

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

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

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

Livestock Indemnity Payments – What They Are and Tax Reporting Options

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

Can One State Regulate Agricultural Production Activities in Other States?

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

Farm Program Payment Limitations and Entity Planning – Part One

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

Farm Program Payment Limitations and Entity Planning – Part Two

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

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

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

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

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

The Prior Converted Cropland Exception From Clean Water Act Jurisdiction

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

Air Emission Reporting Requirement For Livestock Operations

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

Federal Labor Law and Agriculture

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

 Electronic Logs For Truckers and Implications for Agriculture

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

SECURED TRANSACTIONS

Ag Supply Dealer Liens – Important Tool in Tough Financial Times

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

“Commercial Reasonableness” of Collateral Sales

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

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

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

Selling Collateralized Ag Products – The “Farm Products” Rule

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

SEMINARS AND CONFERENCES

Fall Tax Schools

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

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

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

Summer 2018 - Farm Tax and Farm Business Education

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

The Business of Agriculture – Upcoming CLE Symposium

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

Summer Ag Tax/Estate and Business Planning Conference

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

WATER LAW

Prior Appropriation – First in Time, First in Right

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

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

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

Public Access To Private Land Via Water

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

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

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

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

Wednesday, March 31, 2021

Farmland in an Estate – Special Use Valuation and the 25 Percent Test

Overview

Fifty years ago, concerns began to arise in the farm sector about farmland being valued in decedents’ estates at values reflecting commercial development potential rather than values reflecting agricultural purposes.   The concern was particularly acute if the family desired to continue the farming operation after their family member died.  At the time, the federal estate tax exemption was $60,000 and the top rate was 77 percent on gross estate values exceeding $10 million.

The Congress responded by enacting I.R.C. §2032A – special use valuation.  This allows, by election, farmland to be valued in a decedent’s estate for federal estate tax purposes at its value for farming purposes.  But it’s a very complex provision.  One of those complexities, the “25 percent test,” is a key component with an interesting history.

Special use valuation’s 25 percent test – it’s the topic of today’s post.

 Special Use Valuation – Background and Basic Qualification Requirements

The Tax Reform Act of 1976 provided a legislative solution to the perceived problem facing rural landowners of having the farmland in their estates taxed at fair market value (based on a “willing buyer/willing seller” test) reflective of commercial development potential, and based the ability of the IRS to use fluctuating values in agricultural land markets to its advantage.  That solution, in the form of the enactment of I.R.C. §2032A, allows the executor of a decedent’s estate to value farmland in the estate at its value for agricultural purposes rather than fair market value.  The basic idea of the provision is to relieve farm families from having to sell an eligible family farm or business when the income from its present use is insufficient to pay the tax calculated upon its highest and best use.  In recent months, the heightened uncertainty over the future level of the federal estate tax exemption (as well as federal estate tax rate(s)) has increased interest in the utilization of special use valuation. 

Because of the significant tax benefits that can be derived by a decedent’s estate making an election to value qualified elected land under a special use valuation election, numerous requirements must be satisfied.  The following is a listing of the pre-death requirements that an estate must satisfy to make an I.R.C. §2032A election:  

  • The real estate used in farming together with the farm personal property must make up at least 50 percent of the adjusted value of the decedent’s gross estate, using fair market value figures, and that amount or more must pass to qualified heirs. I.R.C. § 2032A(b)(1)(A)
  • The decedent or a member of the decedent’s family must have had an equity interest in the farm operation at the time of death and for five or more of the last eight years before death. I.R.C. §2032A(a)(1), (b)(1)(C)(i).
  • The real estate must have been owned by the decedent or a member of the family and held for a qualified use during five or more years in the eight-year period ending with the decedent’s death. I.R.C. §2032A(b)(1)(C)(i). 
  • The decedent or a member of the decedent’s family must have materially participated in the farming operation for at least five out of the eight years immediately preceding the earlier of the decedent’s death, disability or retirement. I.R.C. §2032A(b)(1)(C)(ii). 
  • The farmland and personal property used in farming must have been “acquired from the decedent to a qualified heir or passed from the decedent” to a qualified heir. I.R.C. 2032A(e)(9). 
  • For land owned by a partnership, the decedent must have had an interest in a closely-held business. I.R.C. § 2032A(g); 6166(b)(1)(B).

The 25 Percent Test

An additional test requirement that must be satisfied for a decedent’s estate to be eligible to make a special use valuation election is that the farmland that is eligible for a special use valuation election must also make up at least 25 percent of the adjusted value of the decedent’s gross estate. I.R.C. §2032A(b)(1)(B).  That requirement sounds simple enough.  However, a question has been raised whether the 25 percent test be satisfied only with property that is subject to a special use valuation election?  Historically, the IRS thought that it did, and adopted a regulation specifying just that.  See Priv. Ltr. Rul. 8042009 (Jun. 30, 1980); Treas. Reg. §20.2032A-8(a)(2).  In 1988, however, the Federal District Court for the Central District of Illinois invalidated the regulation. Miller v. United States, 680 F. Supp. 1269 (C.D. Ill. 1988).  But, the IRS kept auditing and re-litigated the issue, culminating in another court opinion on the matter in 2012.  The IRS lost again. 

The 2012 Case -Finfrock v. United States

In Finfrock v. United States, 860 F. Supp. 2d 651 (C.D. Ill. 2012), the decedent owned 61.05 percent of the stock of Finfrock Farms, Inc. The corporation owned four tracts of real estate – tracts of 40 acres, 122.5 acres, 377.21 acres and 165 acres.  There was no question that the ownership test was satisfied, or that the 50 percent or 25 percent tests were satisfied.  Indeed, the adjusted value of the gross estate was $2,608,848 including the farmland which was valued at 1,775,000.  For the entire eight-year period preceding the decedent’s death, a son farmed the land, and upon the decedent’s death the ownership of the corporation passed to qualified members of the decedent’s family.  The estate elected special use valuation as to the fourth tract of farmland because that was the only tract that the family wished to continue to farm.  The other tracts were sold to unrelated persons shortly after the decedent died.  The fair market value of the fourth tract was $402,930, or about 15 percent of the estate’s adjusted value. The special use value election on that tract dropped its value reported on the estate tax return to $227,233.00.  On audit, the IRS denied the election because the land subject to the election did not exceed 25 percent of the adjusted value of the gross estate. 

The IRS position.  The position of the IRS in Finfrock was that not only must the estate satisfy the 25 percent test to be eligible to make a special use valuation election, the election must be made applicable to at least 25 percent of the value of farmland that is included in the estate (using fair market value figures). 

As noted, the Treasury Regulation at issue in Finfrock had previously been invalidated in 1988 by the same court. Miller v. United States, 680 F. Supp. 1269 (C.D. Ill. 1988).  In Miller, the court held Treas. Reg. §20.2032A-8(a)(2) invalid insofar as it attempted to impose a non-statutory requirement that 25 percent of the adjusted value of the gross estate must consist of farmland subject to the special use valuation election.  The court determined that the regulation was not simply interpretative of the statute, but was legislative in nature because it imposed a requirement that the statute did not contain.  So, the regulation was invalid to the extent it went beyond merely procedural matters (e.g., the proper form to file or information to include on prescribed forms).

After Miller, it was believed that the IRS no longer enforced the regulation against estates.  Obviously, that wasn’t the case in Finfrock, where the IRS again asserted the application of the regulation.  The estate pointed to the 1988 Miller decision, arguing that the statute was clear and unambiguous in that the 25 percent requirement only meant that 25 percent of the adjusted value of the gross estate had to be comprised of farmland.  It did not mean that the election must also be on at least 25 percent of the farmland in the estate.  The IRS argued that the statute was silent on the matter, and that the regulation merely clarified the statutory ambiguity.  But, the court disagreed, noting that the statute’s plain language did not require that the property constituting 25 percent or more of the adjusted value of the gross estate also be subject to the election.  The court held that the statute unambiguously allows an executor to make the election on land comprising less than 25 percent of the adjusted value of the gross estate, and that the regulation impermissibly imposed a requirement in addition to the statute’s plain meaning.  Because the statute was neither silent nor ambiguous, the issue of whether the regulation was a reasonable interpretation of the statute was not in issue. 

Planning Implications

Finfrock reasserts the point that any attempt by the Treasury to limit the scope of a special use valuation election beyond the statute is impermissible.  That’s a key point, particularly when the issue involves the amount of land that must be subjected to a special use value election.   When an election is made, an amount equal to the adjusted tax difference becomes a lien in favor of the United States. I.R.C. §6324B(a). The lien applies “on the property in which such interest exists.”  The lien arises at the time the election is filed and continues until liability for the tax ceases, or the recapture tax has been paid.  I.R.C. §6324B(b).   

The ability to limit the amount of property subject to the lien allows for tailoring of the special use valuation election.  Such tailoring can aid in minimizing the potential for recapture tax being triggered during the ten-year period following the date of the decedent’s death by restricting the election to the land most likely to be continued in farm use during the recapture period.

Conclusion

The present concerns about a potential reduction in the amount that can be excluded from federal estate tax is real in the agricultural sector.  That concern is separate from that over a possible change in the income tax basis rule for property included in a decedent’s estate at death.  Consequently, it may be time to “dust off” the special use valuation provisions and refamiliarize ourselves with its detailed rules.  The 25 percent test is an important one of those.

March 31, 2021 in Estate Planning | Permalink | Comments (0)

Sunday, March 21, 2021

Ag Law and Taxation - 2018 Bibliography

Overview

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

The library of content is piling up.

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

BANKRUPTCY

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

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

Chapter 12 Bankruptcy – Feasibility of the Reorganization Plan

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

Farm Bankruptcy and the Preferential Payment Rule

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

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

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

Agricultural Law Online!

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

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

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

Developments in Ag Law and Tax

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

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

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

BUSINESS PLANNING

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

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

The Spousal Qualified Joint Venture

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

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

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

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

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

Tax Issues When Forming a C Corporation

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

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

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

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

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

Valuation Discounting

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

Valuation Discounting – Part Two

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

The Impact of the TCJA on Estates and Trusts

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

Buy-Sell Agreements for Family Businesses

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

When is an Informal Business Arrangement a Partnership?

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

Management Activities and the Passive Loss Rules

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

Expense Method Depreciation and Trusts

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

Qualified Business Income Deduction – Proposed Regulations

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

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

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

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

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

Farm Wealth Transfer and Business Succession – The GRAT

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

Social Security Planning for Farmers

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

Corporations Post-TCJA and Anti-Corporate Farming Laws

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

Agricultural Law Online!

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

What Happens When a Partner Dies?

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

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

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

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

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

CIVIL LIABILITIES

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

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

Landlord Liability for Injuries Occurring on Leased Premises

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

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

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

When Can I Shoot My Neighbor’s Dog?

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

Reasonable Foreseeability

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

What is “Agriculture” for Purposes of Agritourism?

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

Negligence – Can You Prove Liability?

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

Wind Farm Nuisance Matter Resolved – Buy the Homeowners Out!

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

Torts Down on the Farm

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

Roadkill – It’s What’s for Dinner

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

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

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

Liability for Injuries Associated with Horses

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

Agricultural Law Online!

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

Developments in Ag Law and Tax

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

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

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

CONTRACTS

Is a Farmer a Merchant?  Why it Might Matter

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

Some Thoughts on the Importance of Leasing Farmland

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

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

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

Agricultural Law Online!

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

Disclaiming Implied Warranties

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

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

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

COOPERATIVES

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

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

Agricultural Law Online!

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

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

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

CRIMINAL LIABILITIES

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

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

Establishing the Elements of a Cruelty to Animals Charge

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

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

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

Agricultural Law Online!

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

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

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

ENVIRONMENTAL LAW

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

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

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

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

Is a CWA Permit Needed for Pollution Discharges via Groundwater?

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

Non-Tax Ag Provisions and the Omnibus Bill

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

Wetlands and Farm Programs – Does NRCS Understand the Rules?

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

Regulation of Wetlands and “Ipse Dixit” Determinations

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

WOTUS Developments

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

Does the Migratory Bird Treaty Act Apply to Farmers?

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

Agricultural Law Online!

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

Is Groundwater a “Point Source” Pollutant?

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

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

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

Developments in Ag Law and Tax

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

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

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

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

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

ESTATE PLANNING

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

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

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

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

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

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

The Spousal Qualified Joint Venture

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

Why Clarity in Will/Trust Language Matters

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

Some Thoughts on the Importance of Leasing Farmland

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

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

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

Modifying an Irrevocable Trust – Decanting

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

Valuation Discounting – Part Two

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

The Impact of the TCJA on Estates and Trusts

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

Impact of Post-Death Events on Valuation

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

Beneficiary Designations, Changed Circumstances and the Contracts Clause

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

Qualified Business Income Deduction – Proposed Regulations

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

Spousal Joint Tendencies and Income Tax Basis

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

Farm and Ranch Estate Planning in 2018 and Forward

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

The TCJA, Charitable Giving and a Donor-Advised Fund

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

Agricultural Law Online!

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

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

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

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

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

INCOME TAX

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

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

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

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

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

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

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

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

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

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

Can Farmers Currently Deduct Research Expenditures?

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

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

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

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

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

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

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

Livestock Sold or Destroyed Because of Disease

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

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

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

Deductible Repairs Versus Capitalization

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

The Tax Treatment of Farming Net Operating Losses

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

Congress Modifies the Qualified Business Income Deduction

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

IRS Collections – The Basics

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

Tax Issues Associated with Oil and Gas Production

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

Refundable Fuel Credits – Following the Rules Matters

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

Distinguishing Between a Capital Lease and an Operating Lease

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

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

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

Passive Activities and Grouping

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

Divorce and the New Tax Law – IRS Grants Some Relief

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

Gifts of Ag Commodities to Children and the New Tax Law

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

Post-Death Sale of Crops and Livestock

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

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

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

Purchase and Sale Allocations to CRP Contracts

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

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

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

The Impact of the TCJA on Estates and Trusts

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

The TCJA and I.R.C. 529 Plans

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

Farmers, Self-Employment Tax, and Personal Property Leases

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

State Taxation of Online Sales

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

The Depletion Deduction for Oil and Gas Operations

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

Charitable Giving Post-2017

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

When is an Informal Business Arrangement a Partnership?

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

Management Activities and the Passive Loss Rules

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

Tax Issues on Repossession of Farmland

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

Outline of Tax Proposals Released

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

Life Estate/Remainder Arrangements and Income Tax Basis

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

Expense Method Depreciation and Trusts

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

Qualified Business Income Deduction – Proposed Regulations

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

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

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

Tax Consequences on Partition and Sale of Land

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

Deducting Residual Soil Fertility

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

Social Security Planning for Farmers

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

Eliminating Capital Gain Tax – Qualified Opportunity Zones

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

The TCJA, Charitable Giving and a Donor-Advised Fund

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

Agricultural Law Online!

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

What is Depreciable Farm Real Property?

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

What is “Like-Kind” Real Estate?

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

Developments in Ag Law and Tax

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

Trusts and Like-Kind Exchanges

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

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

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

Non-Depreciable Items on the Farm or Ranch

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

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

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

Expense Method Depreciation and Structures on the Farm

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

Deduction Costs Associated with Items Purchased for Resale

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

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

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

Depletion – What is it and When is it Available?

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

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

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

INSURANCE

Beneficiary Designations, Changed Circumstances and the Contracts Clause

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

Recent Developments Involving Crop Insurance

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

Agricultural Law Online!

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

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

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

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

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

REAL PROPERTY

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

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

Some Thoughts on the Importance of Leasing Farmland

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

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

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

Purchase and Sale Allocations to CRP Contracts

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

Tax Issues on Repossession of Farmland

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

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

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

Agricultural Law Online!

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

What is “Like-Kind” Real Estate?

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

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

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

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

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

REGULATORY LAW

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

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

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

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

Is There a Constitutional Way to Protect Animal Ag Facilities?

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

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

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

Federal Crop Insurance – Some Recent Case Developments

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

Non-Tax Ag Provisions in the Omnibus Bill

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

Are Mandatory Assessments for Generic Advertising of Ag Commodities Constitutional?

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

Wind Farm Nuisance Matter Resolved – Buy the Homeowners Out!

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

Regulation of Wetlands and “Ipse Dixit” Determinations

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

Ag Employment – Verifying the Legal Status of Employees

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

Roadkill – It’s What’s for Dinner

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

Agricultural Law Online!

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

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

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

How Long Can a Train Block a Crossing?

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

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

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

SECURED TRANSACTIONS

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

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

What Are “Proceeds” of Crops and Livestock?

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

Agricultural Law Online!

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

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

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

SEMINARS AND CONFERENCES

Agricultural Law and Economics Conference

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

Summer Farm Income Tax/Estate and Business Planning Conference

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

Upcoming Seminars

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

Fall Tax Seminars

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

Year-End Ag Tax Seminar/Webinar

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

WATER LAW

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

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

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

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

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

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

Agricultural Law Online!

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

Drainage Issues – Rules for Handling Excess Surface Water

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

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

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

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

Friday, March 19, 2021

August National Farm Tax and Estate/Business Planning Conference

Overview

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

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

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

Day 1 Agenda

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

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

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

Day 2 Agenda

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

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

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

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

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

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

Online Attendance

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

Location

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

Room Block

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

Rates

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

Additional Sponsors

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

https://www.1fsb.bank/

https://buddfalen.com/

http://agrilegacy.com/

https://www.baseonline.com/

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

More Information

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

Conclusion

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

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

Friday, March 5, 2021

June National Farm Tax and Estate/Business Planning Conference

Overview

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

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

Day 1 Agenda

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

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

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

Day 2 Agenda

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

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

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

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

Online Attendance

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

Location

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

Room Block

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

Rates

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

Additional Sponsors

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

More Information

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

August Conference

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

Conclusion

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

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

Sunday, February 28, 2021

Ag Law and Taxation - 2019 Bibliography

Overview

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

The library of content is piling up.

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

BANKRUPTCY

Non-Dischargeable Debts in Bankruptcy

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

Developments in Agricultural Law and Taxation

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

More Recent Developments in Agricultural Law

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

More Ag Law and Tax Developments

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

Farmers, Bankruptcy and the “Absolute Priority” Rule

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

Ag in the Courtroom

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

Key Farm Bankruptcy Modification on the Horizon?

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

Ag Legal Issues in the Courts

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

Are Taxes Dischargeable in Bankruptcy?

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

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

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

BUSINESS PLANNING

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

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

Real Estate Professionals and Aggregation – The Passive Loss Rules

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

More Recent Developments in Agricultural Law

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

Self-Rentals and the Passive Loss Rules

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

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

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

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

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

Recent Developments in Farm and Ranch Business Planning

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

ESOPs and Ag Businesses – Part One

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

ESOPs and Ag Businesses – Part Two

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

Is a Discount for The BIG Tax Available?

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

Tax Consequences of Forgiving Installment Payment Debt

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

Ag Law and Tax in the Courts

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

Shareholder Loans and S Corporation Stock Basis

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

The Family Limited Partnership – Part One

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

The Family Limited Partnership – Part Two

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

Does the Sale of Farmland Trigger Net Investment Income Tax?

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

Some Thoughts on Ag Estate/Business/Succession Planning

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

S Corporation Considerations

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

CIVIL LIABILITIES

When is an Employer Liable for the Conduct of Workers?

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

Selected Recent Cases Involving Agricultural Law

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

Ag Nuisances – Basic Principles

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

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

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

What Does a “Reasonable Farmer” Know?

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

Product Liability Down on the Farm - Modifications

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

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

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

More Ag Law and Tax Developments

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

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

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

Ag Law in the Courts

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

Fence Law Basics

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

CONTRACTS

Negotiating Cell/Wireless Tower Agreements

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

Developments in Agricultural Law and Taxation

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

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

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

ENVIRONMENTAL LAW

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

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

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

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

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

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

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

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

Big EPA Developments – WOTUS and Advisory Committees

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

Does Soil Erosion Pose a Constitutional Issue?

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

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

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

More Ag Law and Tax Developments

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

Eminent Domain and Agriculture

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

Court Decisions Illustrates USDA’s Swampbuster “Incompetence”

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

Regulatory Changes to the Endangered Species Act

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

Irrigation Return Flows and the Clean Water Act

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

Ag Law in the Courts

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

Regulatory Takings – Pursuing a Remedy

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

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

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

Groundwater Discharges of Pollutants and the Supreme Court

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

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

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

ESTATE PLANNING

Tax Filing Season Update and Summer Seminar!

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

Time to Review Estate Planning Documents?

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

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

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

Estate Planning in Second Marriage Situations

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

Valuing Non-Cash Charitable Gifts

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

Real Estate Professionals and Aggregation – The Passive Loss Rules

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

Can the IRS Collect Unpaid Estate Tax From the Beneficiaries?

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

Sale of the Personal Residence After Death

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

More Recent Developments in Agricultural Law

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

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

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

Heirs Liable for Unpaid Federal Estate Tax 28 Years After Death

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

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

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

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

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

Recent Developments in Farm and Ranch Business Planning

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

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

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

ESOPs and Ag Businesses – Part One

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

Issues in Estate Planning – Agents, Promises, and Trustees

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

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

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

Ag Law in the Courts

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

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

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

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

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

INCOME TAX

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

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

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

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

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

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

Tax Filing Season Update and Summer Seminar!

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

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

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

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

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

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

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

Tax Matters – Where Are We Now?

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

New Developments on Exclusion of Employer-Provided Meals

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

Valuing Non-Cash Charitable Gifts

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

Passive Losses and Material Participation

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

Passive Losses and Real Estate Professionals

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

Developments in Agricultural Law and Taxation

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

Real Estate Professionals and Aggregation – The Passive Loss Rules

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

Sale of the Personal Residence After Death

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

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

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

Cost Segregation – Risk and Benefits

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

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

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

Self-Rentals and the Passive Loss Rules

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

More on Self-Rentals

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

Of Black-Holes, Tax Refunds, and Statutory Construction

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

What Happened in Tax During Tax Season?

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

Cost Segregation and the Recapture Issue

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

S.E. Tax and Contract Production Income

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

Recent Developments in Farm and Ranch Business Planning

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

Ag Cooperatives and the QBID – Initial Guidance

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

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

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

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

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

More on Real Estate Exchanges

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

2019 Tax Planning for Midwest/Great Plains Farmers and Ranchers

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

Tax Treatment of Settlements and Court Judgments

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

ESOPs and Ag Businesses – Part One

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

Tax “Math” on Jury Verdicts

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

Kansas Revenue Department Takes Aggressive Position Against Remote Sellers

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

Tax-Deferred Exchanges and Conservation Easements

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

Proper Handling of Breeding Fees

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

Proper Tax Reporting of Commodity Wages

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

Tax Consequences of Forgiving Installment Payment Debt

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

Are Taxes Dischargeable in Bankruptcy?

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

Ag Law and Tax in the Courts

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

Refund Claim Relief Due to Financial Disability

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

Shareholder Loans and S Corporation Stock Basis

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

The Family Limited Partnership – Part Two

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

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

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

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

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

Bad Debt Deduction

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

More on Cost Depletion – Bonus Payments

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

Recapture – A Dirty Word in the Tax Code Lingo

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

Does the Sale of Farmland Trigger Net Investment Income Tax?

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

Are Director Fees Subject to Self-Employment Tax?

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

Are Windbreaks Depreciable?

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

Tax Issues Associated with Restructuring Credit Lines

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

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

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

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

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

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

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

INSURANCE

Prevented Planting Payments – Potential Legal Issues?

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

Ag Law in the Courts

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

REAL PROPERTY

 Negotiating Cell/Wireless Tower Agreements

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

Selected Recent Cases Involving Agricultural Law

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

The Accommodation Doctrine – More Court Action

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

Defects in Real Estate Deeds – Will Time Cure All?

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

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

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

Legal Issues Associated with Abandoned Railways

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

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

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

Ag in the Courtroom

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

More on Real Estate Exchanges

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

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

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

Ag Law in the Courts

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

Cost Depletion of Minerals

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

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

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

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

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

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

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

REGULATORY LAW

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

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

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

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

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

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

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

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

Packers and Stockyards Act – Basic Provisions

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

Packers and Stockyards Act Provisions for Unpaid Cash Sellers of Livestock

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

More Recent Developments in Agricultural Law

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

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

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

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

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

Prevented Planting Payments – Potential Legal Issues?

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

Eminent Domain and Agriculture

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

Classification of Seasonal Ag Workers – Why It Matters

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

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

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

Regulation of Food Products

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

Ag Legal Issues in the Courts

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

Kansas Revenue Department Takes Aggressive Position Against Remote Sellers

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

Court Decision Illustrates USDA’s Swampbuster “Incompetence”

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

Ag Law and Tax in the Courts

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

Regulatory Takings – Pursuing a Remedy

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

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

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

SECURED TRANSACTIONS

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

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

SEMINARS AND CONFERENCES

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

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

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

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

Summer Tax and Estate Planning Seminar!

https://lawprofessors.typepad.com/agriculturallaw/2019/07/summer-tax-and-estate-planning-seminar.html

2020 National Summer Ag Income Tax/Estate and Business Planning Seminar

https://lawprofessors.typepad.com/agriculturallaw/2019/12/2020-national-summer-ag-income-taxestate-and-business-planning-seminar.html

Fall Seminars

            https://lawprofessors.typepad.com/agriculturallaw/2019/08/fall-seminars.html

WATER LAW

The Accommodation Doctrine – More Court Action

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

Ag Legal Issues in the Courts

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

Ag Law in the Courts

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

Regulating Existing Water Rights – How Far Can State Government Go?

https://lawprofessors.typepad.com/agriculturallaw/2019/10/regulating-existing-water-rights-how-far-can-state-government-go.html

The Politics of Prior Appropriation – Is a Senior Right Really Senior?

https://lawprofessors.typepad.com/agriculturallaw/2019/12/the-politics-of-prior-appropriation-is-a-senior-right-really-senior.html

Changing Water Right Usage

https://lawprofessors.typepad.com/agriculturallaw/2019/12/changing-water-right-usage.html

February 28, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Thursday, February 18, 2021

Will the Estate Tax Valuation Regulations Return?

Overview

Over the past few decades, valuation discounting through the use of family-owned business entities has become a popular estate and gift tax planning technique. If structured properly, the courts have routinely validated discounts ranging from 10 to 40 percent. Valuation discounting has proven to be a very effective strategy for transferring wealth to subsequent generations. It is a particularly useful technique with respect to the transfer of small family businesses and farming/ranching operations. Similar, but lower, valuation discounts can also be achieved with respect to the transfer of fractional interests in real estate.

With the new Administration and Congress in place, will estate tax valuation regulations be put in place that diminish or eliminate the valuation discounting technique?  It’s a distinct possibility.  If it happens, it will remove a significant planning tool for higher wealth estates and will increase the transfer tax cost of transitioning certain farms and ranches to the next generation.

Estate tax valuation discounts – it’s the topic of today’s post.

Valuation and The Concept of Discounting

The value of an asset for federal estate and gift tax purposes is “fair market value.”  For assets traded on an established market or that have a readily ascertainable value, the value for gift and estate tax purposes is their fair market value on the date of the transfer or death as determined by the established market or the otherwise readily ascertainable value.  For other assets, such as interests in a closely-held (non-publicly trade) farm or ranch.  Fair market value is more difficult to determine.  For this type of property, fair market value is defined as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell, and both having reasonable knowledge of relevant facts.” Treas. Reg. §§20.2031-1(b); 25.2512-1; Rev. Rul. 59-60, 1959-1 C.B. 237.  State law controls the determination of what has been transferred in the valuation process. 

The concept of “fair market value” under the “willing buyer-willing seller” test must necessarily take into account a value reduction to reflect either non-marketability of an interest in a closely-held business as well as any lack of control (minority position) that the interest has. A willing buyer simply would not pay a pro-rata portion of an entity’s value for an interest that is not a controlling interest or is not marketable because it is not publicly traded.  Under this standard, it is immaterial whether the buyer and seller are related – the test is based on a hypothetical buyer and seller. Thus, there is no attribution of ownership between family members that would change a minority interest into a majority interest.

Proposed Regulations

Background.  The two primary tax Code provisions that bear on the valuation issue are I.R.C. §2036 and I.R.C. §2704.  I.R.C. §2036 states that, “[t]he value of the gross estate shall include the value of all property to the extent of any interest therein of which the decedent has at any time made a transfer (except in case of a bona fide sale for an adequate and full consideration in money or money’s worth), by trust or otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death— (1) the possession or enjoyment of, or the right to the income from, the property, or (2) the right, either alone or in conjunction with any person, to designate the persons who shall possess or enjoy the property or the income therefrom.”  I.R.C. §2704 address how to value intra-family transfers of interests in corporations and partnerships subject to lapsing voting or liquidation rights and restrictions on liquidation.  I.R.C. §2704(a)(1) generally provides that, if there is a lapse of any voting or liquidation right in a corporation or a partnership and the individual holding the right immediately before the lapse and members of the individual’s family hold, both before and after the lapse, control of the entity, the lapse will be treated as a transfer by the individual by gift, or a transfer which is includible in the gross estate, whichever is applicable.  Combined, these two Code sections govern transfers of property where the transferor retains certain rights over the property where a bona fide sale for adequate consideration wasn’t received, and the intra-family transfers.  Both of those types of transactions are often a part of estate and business planning for farming and ranching operations.

2016 proposal.  Near the tail-end of the Obama/Biden administration, the Treasury issued proposed regulations (REG-163113-02) that would have significantly curtailed the ability to take valuation discounts on intrafamily transfers of business interests (e.g., discounts for lack of marketability and minority interests) involving both I.R.C. §2036 and I.R.C. §2704.  Specifically, the proposed regulations would treat certain transfers occurring within three years of death that result in the lapse of a liquidation right as transfers occurring at death for purposes of I.R.C. §2704(a). At that time, the IRS explained that the regulations were intended to address estate planning strategies that avoid the application of I.R.C. §2704. The proposed regulations added a three-year rule to narrow the exception to the definition of a lapse of a liquidation right to transfers that occur three or more years prior to the transferor’s death and that do not restrict or eliminate the rights associated with the ownership of the transferred interest.  The proposed regulation was issued by itself, and not also as a temporary regulation, and did not have any provision stating that a taxpayer could rely on it before it is issued as a final regulation.

The effective date of the proposed regulation reaches back to include valuations associated with any lapse of any right created on or after October 8, 1990 occurring on or after the date the proposed regulations is published in the Federal Register as a final regulation. This would make it nearly impossible to avoid the application of the final regulation by various estate planning techniques.

IRS concern.  So, why proposed regulations?  What is the IRS concerned about?  While the IRS has won a number of court cases involving discounting in the context of family limited partnerships (FLPs), it has lost some very significant ones.  The courts have validated discounts associated with FLPs where the FLP was formed for legitimate business purposes and state law formalities have been followed closely.   From my sources both inside and outside of the IRS, the IRS is apparently still encountering situations involving FLPs that are not established in accordance with state law, don’t adequately document the business reasons for forming the FLP and have inaccurate or incomplete asset appraisals.  They think that the revenue loss is large as a result of the technical non-compliance with I.R.C. §§2036 and 2704.   Consequently, the new proposed regulations eliminate the ability to value an interest in an entity (in the aggregate) at an amount less than the value of the value of the property had it not been contributed to the entity.  The IRS view is that the lower value of the property as contained in the entity is an inappropriate way to avoid transfer taxes. 

Elimination of the proposed regulations.  Before the proposed regulations were finalized, President Trump issued Executive Order (EO) 13789.  In that EO, President Trump directed the Treasury Department to review all significant tax regulations issued since January 1, 2016. The Treasury Department was directed to identify regulations that may be “unduly burdensome or complex,” and propose actions to mitigate those burdens.  The Treasury Department identified the proposed valuation regulations as unduly burdensome or complex, and “would have hurt family-owned and operated businesses by limiting valuation discounts.” Additionally, the regulations “would have made it difficult and costly for a family to transfer their businesses to the next generation.” The Treasury Department also noted stakeholders’ concerns that the regulations were vague and would be burdensome to administer.

In withdrawing the proposed regulations, (NPRM REG-163113-02), the Treasury commented that the regulations were “unworkable” and stated that, “it is unclear whether the valuation rules of the proposed regulations would have even succeeded in curtailing artificial valuation discounts.”

Resurrection?

The Biden Treasury Department could revive the withdrawn proposed regulations and potentially finalize them sometime in 2021.  If that happens, the ability to generate valuation discounts for the transfer of family-owned entities such as farm and ranches would be seriously impacted. 

Clearly, the Treasury can write regulations that specify that certain restrictions on transfer can be disregarded when determining the value of an interest in an entity to a family member of the transferor.  However, without legislation allowing it, the IRS cannot simply ignore discounts for lack of marketability or lack of control (minority interest).  Long-standing interpretations of I.R.C. §2704 (and I.R.C. §2036) by the Tax Court and the Circuit Courts support valuation discounts when the transaction is done properly.  As a result, the Courts may have a different view than the IRS/Treasury with respect to the proposed regulations based on the longstanding Congressional intent to allow discounts in a family context. Having discretion does not mean that Treasury has discretion to determine value as it pleases.

Conclusion

The possibility of the valuation regulations returning puts an emphasis on examining estate and transition plans now.  It’s a good idea to have a wealth transfer strategy in place.  While the political margins are close in the House and Senate, the Treasury and IRS could significantly alter the planning landscape without any need for congressional approval. 

The valuation discounting issue merits close attention.

February 18, 2021 in Business Planning, Estate Planning | Permalink | Comments (0)

Saturday, February 6, 2021

What Now? – Part Two

Overview

In Part One earlier this week, I took a look at the possible income tax-related changes that might be on the horizon and the planning implications of such changes.  In today’s post I turn the spotlight to potential changes that could impact estate and business planning.  Will estate and gift tax rates change?  What about the level of the federal estate and gift tax exemption?  Will the income tax basis rule change when a person dies?  Will valuation discounts be available?  These are all important questions that bear on how the farming or ranching business should be structured to facilitate an intergenerational transfer.  These are all questions that are on the minds of many farm and ranch families. 

Potential law changes that could impact farm and ranch estate and business planning – it’s the topic of today’s post.

Estate and Gift Tax Exemption

When I first started practicing, the federal estate and gift tax exemption sheltered $600,000 of wealth.  That seems like a pittance now with the current level set at $11.7 million for deaths in and taxable gifts made in 2021.  Indeed, the farm and ranch estate and business planning practice was robust at the time.  Even 30 years ago, it was quite easy for a modest-sized farming operation to reach the $600,000 net worth level.  That meant that proper structuring of entities, leases, asset ownership and coordinated provisions in wills and trusts were very important.  In addition, in situations where it was clear that the family would continue farming after the death(s) of the senior generation, it was necessary to coordinate the planning with an eye toward a possible special use valuation election in the first spouse’s (and sometimes also the second spouse’s) estate.  With the possible reduction of the exemption being discussed those planning techniques and concepts will be back in vogue.

USDA data indicates that the present average U.S. farmland value for all classes of land averaged $3,160 per acre in 2020.  Nationwide, the average farm size is 445 acres.  Thus, the typical U.S. farming operation has land worth $1,406,200.  Add in livestock, farm machinery and equipment, grain inventory, the home and outbuildings, retirement savings, life insurance and other miscellaneous assets, the typical farm estate will routinely have an asset value totaling anywhere from three million to five million dollars.  Of course, these are averages and the federal estate tax is based on net worth (asset value less debt), but the point is that a reduction in the exemption to under at or under the $5 million level would be of considerable concern to many farm and ranch families (and other small business owners). 

Some proposals that I have seen would lower the exemption anywhere in a range from $3.5 million $5 million.  If that happens, a key question is whether it would be indexed for inflation and whether the reduction would apply retroactively to January 1, 2021.  Any retroactive change could make some prior tax-free gifts taxable.  There is also talk about increasing the top federal estate and gift tax rate to at least 45%. 

While no estate plan can accurately anticipate all potential changes in the law, clearly delaying estate planning now increases the potential that a detrimental change in the law would be in effect before the estate/business plan could be finished. 

Planning strategies.  So, what might be some strategies that could be employed right now?  What’s the most efficient way to use the current exemption amount? 

  • Various types of trusts. Gifting property to an irrevocable trust containing a disclaimer provision provides needed flexibility to adjust for changes in the exemption level.  It can also be used to shift income among beneficiaries.  The trust can be carefully drafted to give the grantor limited access to trust assets while simultaneously protecting trust assets from creditor claims and/or and IRS claim that the trust assets should be included in the grantor’s estate. 

For some assets, a better approach may be to have the owner borrow against them and gift the cash to a trust.  This was an approach that was used in prior years when the exemption was much lower.  The loaned funds are then gifted to a trust and covered by the exemption so that no gift tax occurs.  The leveraged asset remains in the estate but with debt against it.  The result is that the taxable value of the decedent’s estate is reduced.

  • Valuation discounting. A common estate/business planning technique when the exemption was much lower than its present level was to utilize various valuation discounting approaches with respect to interests in entities.  Such discounts from fairy market value can be achieved to reflect the owner’s minority interest in an entity as well as the fact that the interest is in an entity that is not publicly traded and, as a result, lacks marketability.  A $10 million interest, therefore, may be able to be valued in the decedent’s estate with a discounted value of $8 million, for example, to reflect that the decedent only owned 30% (as an example) of a small, closely-held farming or ranching operation.  The IRS has routinely attacked valuation discounting, and the regulations on the matter that were frozen during the Trump Administration now will likely come back.  If so, valuation discount planning may become unavailable. 
  • GRAT.  One popular estate planning technique for the higher-valued estates has been the use of a grantor-retained annuity trust (GRAT).  With this approach, the grantor transfers assets to a trust in return for an annuity.  As the trust assets grow in value, any value above the specified annuity amount benefits the grantor’s heir(s) without being subject to federal gift tax.  Of course, if the exemption is lowered, more estates will be in the “high-value” category and the GRAT technique could be even more widespread in use.  Unfortunately, there are discussions that up to 25 percent of the value of assets transferred to a GRAT would be taxed.  If that occurs, the GRAT technique would go by the wayside.
  • Gifting.  A longstanding strategy for large estates that will potentially exceed the exemption amount at death is to use annual exclusion gifts (either outright or via interests in closely-held family entities) to ultimately reduce the size of the taxable estate to an amount that would be fully covered by the exemption amount.  The strategy has become less popular in recent years given the substantial increase in the exclusion amount to its present level of $11.7 million for deaths and gifts made in 2021.  However, current law causes the exclusion amount to decrease to $5 million (plus an adjustment for inflation from 2018) beginning in 2026.  If the exemption were to be reduced to the $3.5 million to $5 million range before then that could place an emphasis for some estates to make gifts now and cover it with the currently higher exemption amount. 
  • One thing to keep in mind with this strategy is a concern that was first raised when the Tax Cuts and Jobs Act was enacted in late 2017.  That is the issue of “clawback” – whether gifts made between 2018 and 2025 that utilized the larger exemption amount will trigger additional estate tax.  In late 2019, the Treasury issued Final Regulations taking the position that clawback will not be imposed when the exclusion drops to the $5 million amount (with an inflation adjustment) at the start of 2026.  T.D. 9884.  Thus, in accordance with the Final Regulation, and estate can compute its estate tax liability using the higher exemption amount that was in effect at the time the gift(s).  Of course, if the law changes the exemption amount before 2026, the Final Regulation wouldn’t apply.  It would then be up to the Treasury whether to utilize clawback on an estate with a lower exemption amount that at the time the decedent made gifts.

  • Under the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97,the basic exclusion amount (BEA) was increased from $5 million to $10 million, indexed for inflation. In 2020, the inflation-indexed BEA is $11.58 million. The TCJA states that the increased $10 million BEA will be in place only until the end of 2025, after which it will revert to the previous $5 million BEA, indexed for inflation. Those in a position to make larger gifts have an opportunity to seize the increased BEA before it is lost; but, in doing so, one should not forget some long-standing gift planning considerations.  Before discussing potential planning that may make use of the increased BEA, it is important to address one concern raised after the enactment of the TCJA regarding whether larger gifts made between 2018 and 2025 that used the increased BEA would give rise to additional estate tax once the exclusion returns to its reduced amount as scheduled under current law. On Nov. 26, 2019, Treasury and the IRS released final regulations (T.D. 9884), clarifying that there will be no "clawback" when the exclusion amount reverts to $5 million (inflation indexed) at the beginning of 2026. Instead, an estate will be allowed to compute its estate tax using the increased BEA that was in effect when the gifts from 2018 to 2025 were made.
  • Retroactive change. A retroactive change in the estate/gift tax exemption would pose special problems.  One effect could be that a taxable gift covered by the current $11.7 million exemption would now be taxable to the extent it exceeds the new, lowered exemption level.  This effect can be avoided with a special type of marital trust (assuming that the transferor is married) coupled with an election (known as a “QTIP” election).  This would involve some guessing as to what the new (lower) exemption level would be.  The election ideally would be made on only with respect to the value of enough property such that the balance could remain exempt from estate tax as covered by the new (lower) exemption amount.  For large estates where both spouses utilize this technique, the “reciprocal trust doctrine” would need to be avoided.

Another way to potentially combat a retroactive reduction in the exemption is to incorporate formula language in a trust that sets forth the value of property gifted to the trust.  Often this approach is used when gifting fractional interests in an entity (such as a limited liability company) to the trust.  The formula language must be drafted with precision.  For example, in Wandry v. Comr., T.C. Memo. 2012-88, formula clause language was upheld as valid because it caused the transfer of percentage interests to the donees equal in value to the amounts set forth in the associated gift documents (i.e., dollar amounts) rather than fixed percentage interests. But, in Nelson v. Comr., T.C. Memo. 2020-81, the tax court determined that the formula clause language was ineffective because it resulted in the transfer of fixed dollar amounts resulting in a substantial gift tax deficiency. 

Disclaimer language in trust instruments can also be used to allow flexibility to deal with a retroactive change in the exemption level.  I.R.C. §2518.  A disclaimer is a renunciation of rights to property that would otherwise pass to the person if they didn’t exercise their right to disclaim receiving the property.  There are also ways to create what I would call a “defective” disclaimer to deal with the issue of retroactivity.  Again, it’s a very complex matter that requires clear and precise drafting. 

Other Potential Changes

GSTT.  There is additional buzz about imposing the current generation-skipping transfer tax (GSTT) on certain “perpetual” or long-term trusts periodically.  For most people, this would be a minor issue.

Present interest gifts.  One proposal is to cap the present interest exclusion for gift tax purposes to $20,000 per donor.  Presently, a person can give up to $15,000 to a donee annually (on a cumulative basis) and incur no gift tax.  There is no limit on the number of donees under current law.  Restricting the provision to $20,000 per donor annually would be a substantial restriction on the ability to make non-taxable gifts.  This would be a significant change by itself, but when combined with a lower estate tax exemption, such a change would be monumental.  Tax-free gifting techniques have long been used as an estate tax minimization strategy.  That would change if this provision were to become law. 

Income tax basis.  This is the “monster” in the room.  Currently, an asset that is included in a decedent’s estate at death for tax purposes receives an income tax basis in the hands of the heir(s) equal to the fair market value of the asset at the time of death.   I.R.C. §1014. This is commonly referred to as “stepped-up” basis.  Thus, if the heir were to sell the asset capital gains tax for the heir would be computed as the difference between the selling price of the asset and the value at the time of the heir inherited the asset.  For an asset that is sold shortly after inheritance, the capital gains tax is likely to be minimal to none.  If the stepped-up basis rule were to be eliminated, the heir would receive the decedent’s income tax basis. For farmland that the decedent owned for many years, for example, that basis could be much lower than the date-of-death value.  That would be particularly the case if the decedent had received the farmland by gift, receiving the donor’s income tax basis in the farmland at the time of the gift.  The result would be heir’s being hit with large capital gains tax, or simply refusing to sell the land (if possible) and creating a “lock-in” effect with respect to certain assets.  To make matters worse, there is even talk of imposing a capital gains tax on the appreciated value at the time of death, rather than at the time the heir sells the inherited property that has appreciated in value. 

A change in the income tax basis rule would substantially impact estate and business planning.  This is particularly true with respect to farm and ranch estates where many assets have a low basis – either from being owned for many years or because of income tax planning strategies that have substantially diminished or eliminated the basis in assets. 

Conclusion

Now is certainly the time to engage tax and estate/business planning professionals in discussion about income tax planning, estate planning and entity structuring.  The legislation that has been discussed as potentially coming in the near future has important implications for farming and ranching operations (and other small businesses) that desire to continue into the next generation.  I will be addressing these issues and providing planning suggestions at my two national event this summer.  Shawnee State Park in Ohio on in early June and Missoula, Montana in early August.  Registration details will be available soon.  Maybe we will have more details by then and can craft plans forward.

February 6, 2021 in Estate Planning | Permalink | Comments (0)

Wednesday, January 20, 2021

Ag Law and Taxation 2020 Bibliography

Overview

Today's post is a bibliography of my ag law and tax blog articles of 2020.  Many of you have requested that I provide something like this to make it easier to find the articles.  If possible, I will do the same for articles from prior years.  The library of content is piling up - I have written more than 500 detailed articles for the blog over the last four and one-half years.

Cataloging the 2020 ag law and tax blog articles - it's the topic of today's post.

BANKRUPTCY

Ag Law and Tax in the Courts – Bankruptcy Debt Discharge; Aerial Application of Chemicals; Start-Up Expenses and Lying as Protected Speech

https://lawprofessors.typepad.com/agriculturallaw/2020/01/ag-law-and-tax-in-the-courts-bankruptcy-debt-discharge-aerial-application-of-chemicals-start-up-expe.html

Unique, But Important Tax Issues – “Claim of Right;” Passive Loss Grouping; and Bankruptcy Taxation

https://lawprofessors.typepad.com/agriculturallaw/2020/01/unique-but-important-tax-issues-claim-of-right-passive-loss-grouping-and-bankruptcy-taxation.html

Disaster/Emergency Legislation – Summary of Provisions Related to Loan Relief; Small Business and Bankruptcy

https://lawprofessors.typepad.com/agriculturallaw/2020/04/disasteremergency-legislation-summary-of-provisions-related-to-loan-relief-small-business-and-bankruptcy.html

Retirement-Related Provisions of the CARES Act

https://lawprofessors.typepad.com/agriculturallaw/2020/04/retirement-related-provisions-of-the-cares-act.html

Farm Bankruptcy – “Stripping, “Claw-Black,” and the Tax Collecting Authorities

https://lawprofessors.typepad.com/agriculturallaw/2020/05/farm-bankruptcy-stripping-claw-back-and-the-tax-collecting-authorities.html

SBA Says Farmers in Chapter 12 Ineligible for PPP Loans

https://lawprofessors.typepad.com/agriculturallaw/2020/06/sba-says-farmers-in-chapter-12-ineligible-for-ppp-loans.html

The “Cramdown” Interest Rate in Chapter 12 Bankruptcy

https://lawprofessors.typepad.com/agriculturallaw/2020/07/the-cramdown-interest-rate-in-chapter-12-bankruptcy.html

Bankruptcy and the Preferential Payment Rule

https://lawprofessors.typepad.com/agriculturallaw/2020/12/bankruptcy-and-the-preferential-payment-rule.html

BUSINESS PLANNING

Partnership Tax Ponderings – Flow-Through and Basis

https://lawprofessors.typepad.com/agriculturallaw/2020/02/partnership-tax-ponderings-flow-through-and-basis.html

Farm and Ranch Estate and Business Planning in 2020 (Through 2025)

https://lawprofessors.typepad.com/agriculturallaw/2020/03/farm-and-ranch-estate-and-business-planning-in-2020-through-2025.html

Transitioning the Farm or Ranch – Stock Redemption

https://lawprofessors.typepad.com/agriculturallaw/2020/07/transitioning-the-farm-or-ranch-stock-redemption.html

Estate and Business Planning for the Farm and Ranch Family – Use of the LLC (Part 1)

https://lawprofessors.typepad.com/agriculturallaw/2020/07/estate-and-business-planning-for-the-farm-and-ranch-family-use-of-the-llc-part-1.html

Estate and Business Planning for the Farm and Ranch Family – Use of the LLC (Part 2)

https://lawprofessors.typepad.com/agriculturallaw/2020/07/estate-and-business-planning-for-the-farm-and-ranch-family-use-of-the-llc-part-two.html

The Use of the LLC for the Farm or Ranch Business – Practical Application

https://lawprofessors.typepad.com/agriculturallaw/2020/08/the-use-of-the-llc-for-the-farm-or-ranch-business-practical-application.html

CIVIL LIABILITIES

Top Ten Agricultural Law and Tax Developments from 2019 (Numbers 10 and 9)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-from-2019-numbers-10-and-9.html

Ag Law in the Courts – Feedlots; Dicamba Drift; and Inadvertent Disinheritance

https://lawprofessors.typepad.com/agriculturallaw/2020/01/ag-law-in-the-courts-feedlots-dicamba-drift-and-inadvertent-disinheritance.html

Ag Law and Tax in the Courts – Bankruptcy Debt Discharge; Aerial Application of Chemicals; Start-Up Expenses and Lying as Protected Speech

https://lawprofessors.typepad.com/agriculturallaw/2020/01/ag-law-and-tax-in-the-courts-bankruptcy-debt-discharge-aerial-application-of-chemicals-start-up-expe.html

Dicamba, Peaches and a Defective Ferrari; What’s the Connection?

https://lawprofessors.typepad.com/agriculturallaw/2020/05/dicamba-peaches-and-a-defective-ferrari-whats-the-connection.html

Liability for Injuries Associated with Horses (and Other Farm Animals)

https://lawprofessors.typepad.com/agriculturallaw/2020/06/liability-for-injuries-associated-with-horses-and-other-farm-animals.html

Issues with Noxious (and Other) Weeds and Seeds

https://lawprofessors.typepad.com/agriculturallaw/2020/09/issues-with-noxious-and-other-weeds-and-seeds.html

Of Nuisance, Overtime and Firearms – Potpourri of Ag Law Developments

https://lawprofessors.typepad.com/agriculturallaw/2020/11/of-nuisance-overtime-and-firearms-potpourri-of-ag-law-developments.html

CONTRACTS

The Statute of Frauds and Sales of Goods

https://lawprofessors.typepad.com/agriculturallaw/2020/01/the-statute-of-frauds-and-sales-of-goods.html

Disrupted Economic Activity and Force Majeure – Avoiding Contractual Obligations in Time of Pandemic

https://lawprofessors.typepad.com/agriculturallaw/2020/04/disrupted-economic-activity-and-force-majeure-avoiding-contractual-obligations-in-time-of-pandemic.html

Is it a Farm Lease or Not? – And Why it Might Matter

https://lawprofessors.typepad.com/agriculturallaw/2020/11/is-it-a-farm-lease-or-not-and-why-it-might-matter.html

COOPERATIVES

Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 2 and 1)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-of-2019-numbers-2-and-1.html

Concentrated Ag Markets – Possible Producer Response?

https://lawprofessors.typepad.com/agriculturallaw/2020/05/concentrated-ag-markets-possible-producer-response.html

CRIMINAL LIABILITIES

Is an Abandoned Farmhouse a “Dwelling”?

https://lawprofessors.typepad.com/agriculturallaw/2020/02/is-an-abandoned-farmhouse-a-dwelling.html

ENVIRONMENTAL LAW

Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 8 and 7)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-of-2019-numbers-8-and-7.html

Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 6 and 5)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-of-2019-numbers-six-and-five.html

Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 4 and 3)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-of-2019-numbers-4-and-3.html

Clean Water Act – Compliance Orders and “Normal Farming Activities”

https://lawprofessors.typepad.com/agriculturallaw/2020/03/clean-water-act-compliance-orders-and-normal-farming-activities.html

Groundwater Discharges of “Pollutants” and “Functional Equivalency”

https://lawprofessors.typepad.com/agriculturallaw/2020/04/groundwater-discharges-of-pollutants-and-functional-equivalency.html

NRCS Highly Erodible Land and Wetlands Conservation Final Rule – Clearer Guidance for Farmers or Erosion of Property Rights? – Part One

https://lawprofessors.typepad.com/agriculturallaw/2020/09/nrcs-highly-erodible-land-and-wetlands-conservation-final-rule-clearer-guidance-for-farmers-or-erosi.html

NRCS Highly Erodible Land and Wetlands Conservation Final Rule – Clearer Guidance for Farmers or Erosion of Property Rights? – Part Two

https://lawprofessors.typepad.com/agriculturallaw/2020/09/nrcs-highly-erodible-land-and-wetlands-conservation-final-rule-clearer-guidance-for-farmers-or-loss-of-property-rights.html

NRCS Highly Erodible Land and Wetlands Conservation Final Rule – Clearer Guidance for Farmers or Erosion of Property Rights? – Part Three

https://lawprofessors.typepad.com/agriculturallaw/2020/09/nrcs-highly-erodible-land-and-wetlands-conservation-final-rule-clearer-guidance-for-farmers-or-loss-of-property-rights-1.html

The Prior Converted Cropland Exception – More Troubles Ahead?

https://lawprofessors.typepad.com/agriculturallaw/2020/09/the-prior-converted-cropland-exception-more-troubles-ahead.html

TMDL Requirements – The EPA’s Federalization of Agriculture

            https://lawprofessors.typepad.com/agriculturallaw/2020/10/tmdl-requirements-.html

Eminent Domain and “Seriously Misleading” Financing Statements

https://lawprofessors.typepad.com/agriculturallaw/2020/10/eminent-domain-and-seriously-misleading-financing-statements.html

 

ESTATE PLANNING

Ag Law in the Courts – Feedlots; Dicamba Drift; and Inadvertent Disinheritance

https://lawprofessors.typepad.com/agriculturallaw/2020/01/ag-law-in-the-courts-feedlots-dicamba-drift-and-inadvertent-disinheritance.html

Recent Developments Involving Estates and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2020/02/recent-developments-involving-decedents-estates-and-trusts.html

What is a “Trade or Business” For Purposes of Installment Payment of Federal Estate Tax?

https://lawprofessors.typepad.com/agriculturallaw/2020/03/what-is-a-trade-or-business-for-purposes-of-installment-payment-of-federal-estate-tax.html

Alternate Valuation – Useful Estate Tax Valuation Provision

https://lawprofessors.typepad.com/agriculturallaw/2020/03/alternate-valuation-useful-estate-tax-valuation-provision.html

Farm and Ranch Estate and Business Planning in 2020 (Through 2025)

https://lawprofessors.typepad.com/agriculturallaw/2020/03/farm-and-ranch-estate-and-business-planning-in-2020-through-2025.html

Retirement-Related Provisions of the CARES Act

https://lawprofessors.typepad.com/agriculturallaw/2020/04/retirement-related-provisions-of-the-cares-act.html

Are Advances to Children Loans or Gifts?

https://lawprofessors.typepad.com/agriculturallaw/2020/06/are-advances-to-children-loans-or-gifts.html

Tax Issues Associated with Options in Wills and Trusts

https://lawprofessors.typepad.com/agriculturallaw/2020/06/tax-issues-associated-with-options-in-wills-and-trusts.html

Valuing Farm Chattels and Marketing Rights of Farmers

https://lawprofessors.typepad.com/agriculturallaw/2020/06/valuing-farm-chattels-and-marketing-rights-of-farmers.html

Is it a Gift or Not a Gift? That is the Question

https://lawprofessors.typepad.com/agriculturallaw/2020/06/is-it-a-gift-or-not-a-gift-that-is-the-question.html

Does a Discretionary Trust Remove Fiduciary Duties a Trustee Owes Beneficiaries?

https://lawprofessors.typepad.com/agriculturallaw/2020/10/does-a-discretionary-trust-remove-fiduciary-duties-a-trustee-owes-beneficiaries.html

Can I Write my Own Will? Should I?

https://lawprofessors.typepad.com/agriculturallaw/2020/10/can-i-write-my-own-will-should-i.html

Income Taxation of Trusts – New Regulations

https://lawprofessors.typepad.com/agriculturallaw/2020/10/income-taxation-of-trusts.html

Merging a Revocable Trust at Death with an Estate – Tax Consequences

https://lawprofessors.typepad.com/agriculturallaw/2020/11/merging-a-revocable-trust-at-death-with-an-estate-tax-consequences.html

When is Transferred Property Pulled Back into the Estate at Death?  Be on Your Bongard!

https://lawprofessors.typepad.com/agriculturallaw/2020/11/when-is-transferred-property-pulled-back-into-the-estate-at-death-be-on-your-bongard.html

‘Tis the Season for Giving, But When is a Transfer a Gift?

https://lawprofessors.typepad.com/agriculturallaw/2020/12/tis-the-season-for-giving-but-when-is-a-transfer-a-gift.html

 

INCOME TAX

Top Ten Agricultural Law and Tax Developments of 2019 (Numbers 2 and 1)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-of-2019-numbers-2-and-1.html

Does the Penalty Relief for a “Small Partnership” Still Apply?

https://lawprofessors.typepad.com/agriculturallaw/2020/01/does-the-penalty-relief-for-a-small-partnership-still-apply.html

Substantiation – The Key to Tax Deductions

https://lawprofessors.typepad.com/agriculturallaw/2020/01/substantiation-the-key-to-tax-deductions.html

Ag Law and Tax in the Courts – Bankruptcy Debt Discharge; Aerial Application of Chemicals; Start-Up Expenses and Lying as Protected Speech

https://lawprofessors.typepad.com/agriculturallaw/2020/01/ag-law-and-tax-in-the-courts-bankruptcy-debt-discharge-aerial-application-of-chemicals-start-up-expe.html

Unique, But Important Tax Issues – “Claim of Right;” Passive Loss Grouping; and Bankruptcy Taxation

https://lawprofessors.typepad.com/agriculturallaw/2020/01/unique-but-important-tax-issues-claim-of-right-passive-loss-grouping-and-bankruptcy-taxation.html

Conservation Easements and the Perpetuity Requirement

https://lawprofessors.typepad.com/agriculturallaw/2020/02/conservation-easements-and-the-perpetuity-requirement.html

Tax Treatment Upon Death of Livestock

https://lawprofessors.typepad.com/agriculturallaw/2020/02/tax-treatment-upon-death-of-livestock.html

What is a “Trade or Business” For Purposes of I.R.C. §199A?

https://lawprofessors.typepad.com/agriculturallaw/2020/02/what-is-a-trade-or-business-for-purposes-of-irc-199a.html

Tax Treatment of Meals and Entertainment

https://lawprofessors.typepad.com/agriculturallaw/2020/03/tax-treatment-of-meals-and-entertainment.html

Farm NOLs Post-2017

            https://lawprofessors.typepad.com/agriculturallaw/2020/03/farm-nols-post-2017.html

Disaster/Emergency Legislation – Summary of Provisions Related to Loan Relief; Small Business and Bankruptcy

https://lawprofessors.typepad.com/agriculturallaw/2020/04/disasteremergency-legislation-summary-of-provisions-related-to-loan-relief-small-business-and-bankruptcy.html

Retirement-Related Provisions of the CARES Act

https://lawprofessors.typepad.com/agriculturallaw/2020/04/retirement-related-provisions-of-the-cares-act.html

Income Tax-Related Provisions of Emergency Relief Legislation

https://lawprofessors.typepad.com/agriculturallaw/2020/04/income-tax-related-provisions-of-emergency-relief-legislation.html

The Paycheck Protection Program – Still in Need of Clarity

https://lawprofessors.typepad.com/agriculturallaw/2020/05/the-paycheck-protection-program-still-in-need-of-clarity.html

Solar “Farms” and The Associated Tax Credit

https://lawprofessors.typepad.com/agriculturallaw/2020/05/solar-farms-and-the-associated-tax-credit.html

Obtaining Deferral for Non-Deferred Aspects of an I.R.C. §1031 Exchange

https://lawprofessors.typepad.com/agriculturallaw/2020/05/obtaining-deferral-for-non-deferred-aspects-of-an-irc-1031-exchange-.html

Conservation Easements – The Perpetuity Requirement and Extinguishment

https://lawprofessors.typepad.com/agriculturallaw/2020/05/conservation-easements-the-perpetuity-requirement-and-extinguishment.html

PPP and PATC Developments

https://lawprofessors.typepad.com/agriculturallaw/2020/06/ppp-and-patc-developments.html

How Many Audit “Bites” of the Same Apple Does IRS Get?

https://lawprofessors.typepad.com/agriculturallaw/2020/07/how-many-audit-bites-of-the-same-apple-does-irs-get.html

More Developments Concerning Conservation Easements

https://lawprofessors.typepad.com/agriculturallaw/2020/07/more-developments-concerning-conservation-easements.html

Imputation – When Can an Agent’s Activity Count?

https://lawprofessors.typepad.com/agriculturallaw/2020/07/imputation-when-can-an-agents-activity-count.html

Exotic Game Activities and the Tax Code

https://lawprofessors.typepad.com/agriculturallaw/2020/08/exotic-game-activities-and-the-tax-code.html

Demolishing Farm Buildings and Structures – Any Tax Benefit?

         https://lawprofessors.typepad.com/agriculturallaw/2020/08/demolishing-farm-buildings-and-structures-any-tax-benefit.html

Tax Incentives for Exported Ag Products

https://lawprofessors.typepad.com/agriculturallaw/2020/08/tax-incentives-for-exported-ag-products.html

Deducting Business Interest

https://lawprofessors.typepad.com/agriculturallaw/2020/09/deducting-business-interest.html

Recent Tax Court Opinions Make Key Point on S Corporations and Meals/Entertainment Deductions

https://lawprofessors.typepad.com/agriculturallaw/2020/09/recent-tax-court-opinions-make-key-points-on-s-corporations-and-mealsentertainment-deductions.html

Income Taxation of Trusts – New Regulations

https://lawprofessors.typepad.com/agriculturallaw/2020/10/income-taxation-of-trusts.html

Accrual Accounting – When Can a Deduction Be Claimed?

https://lawprofessors.typepad.com/agriculturallaw/2020/11/accrual-accounting-when-can-a-deduction-be-claimed.html

Farmland Lease Income – Proper Tax Reporting

https://lawprofessors.typepad.com/agriculturallaw/2020/11/farmland-lease-income-proper-tax-reporting.html

Merging a Revocable Trust at Death with an Estate – Tax Consequences

https://lawprofessors.typepad.com/agriculturallaw/2020/11/merging-a-revocable-trust-at-death-with-an-estate-tax-consequences.html

The Use of Deferred Payment Contracts – Specifics Matter

https://lawprofessors.typepad.com/agriculturallaw/2020/11/the-use-of-deferred-payment-contracts-specific-matters.html

Is Real Estate Held in Trust Eligible for I.R.C. §1031 Exchange Treatment?

https://lawprofessors.typepad.com/agriculturallaw/2020/11/is-real-estate-held-in-trust-eligible-for-irc-1031-exchange-treatment.html

 

INSURANCE

Recent Court Developments of Interest

https://lawprofessors.typepad.com/agriculturallaw/2020/07/recent-court-developments-of-interest.html

PUBLICATIONS

Principles of Agricultural Law

https://lawprofessors.typepad.com/agriculturallaw/2020/01/principles-of-agricultural-law.html

 

REAL PROPERTY

Signing and Delivery

https://lawprofessors.typepad.com/agriculturallaw/2020/02/deed-effectiveness-signing-and-delivery.html

Abandoned Railways and Issues for Adjacent Landowners

https://lawprofessors.typepad.com/agriculturallaw/2020/04/abandoned-railways-and-issues-for-adjacent-landowners.html

Obtaining Deferral for Non-Deferred Aspects of an I.R.C. §1031 Exchange

https://lawprofessors.typepad.com/agriculturallaw/2020/05/obtaining-deferral-for-non-deferred-aspects-of-an-irc-1031-exchange-.html

Are Dinosaur Fossils Minerals?

https://lawprofessors.typepad.com/agriculturallaw/2020/06/are-dinosaur-fossils-minerals.html

Real Estate Concepts Involved in Recent Cases

https://lawprofessors.typepad.com/agriculturallaw/2020/10/real-estate-concepts-involved-in-recent-cases.html

Is it a Farm Lease or Not? – And Why it Might Matter

https://lawprofessors.typepad.com/agriculturallaw/2020/11/is-it-a-farm-lease-or-not-and-why-it-might-matter.html

 

REGULATORY LAW

Top Ten Agricultural Law and Tax Developments from 2019 (Numbers 10 and 9)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-from-2019-numbers-10-and-9.html

Top Ten Agricultural Law and Tax Developments from 2019 (Number 8 and 7)

https://lawprofessors.typepad.com/agriculturallaw/2020/01/top-ten-agricultural-law-and-tax-developments-of-2019-numbers-8-and-7.html

Ag Law and Tax in the Courts – Bankruptcy Debt Discharge; Aerial Application of Chemicals; Start-Up Expenses and Lying as Protected Speech

https://lawprofessors.typepad.com/agriculturallaw/2020/01/ag-law-and-tax-in-the-courts-bankruptcy-debt-discharge-aerial-application-of-chemicals-start-up-expe.html

Hemp Production – Regulation and Economics

https://lawprofessors.typepad.com/agriculturallaw/2020/04/hemp-production-regulation-and-economics.html

DOJ to Investigate Meatpackers – What’s it All About?

https://lawprofessors.typepad.com/agriculturallaw/2020/05/doj-to-investigate-meatpackers-whats-it-all-about.html

Dicamba Registrations Cancelled – Or Are They?

https://lawprofessors.typepad.com/agriculturallaw/2020/06/dicamba-registrations-cancelled-or-are-they.html

What Does a County Commissioner (Supervisor) Need to Know?

https://lawprofessors.typepad.com/agriculturallaw/2020/06/what-does-a-county-commissioner-supervisor-need-to-know.html

The Supreme Court’s DACA Opinion and the Impact on Agriculture

https://lawprofessors.typepad.com/agriculturallaw/2020/07/the-supreme-courts-daca-opinion-and-the-impact-on-agriculture.html

Right-to-Farm Law Headed to the SCOTUS?

https://lawprofessors.typepad.com/agriculturallaw/2020/08/right-to-farm-law-headed-to-the-scotus.html

The Public Trust Doctrine – A Camel’s Nose Under Agriculture’s Tent?

https://lawprofessors.typepad.com/agriculturallaw/2020/10/the-public-trust-doctrine-a-camels-nose-under-agricultures-tent.html

Roadkill – It’s What’s for Dinner (Reprise)

https://lawprofessors.typepad.com/agriculturallaw/2020/10/roadkill-its-whats-for-dinner-reprise.html

Beef May be for Dinner, but Where’s It From?

https://lawprofessors.typepad.com/agriculturallaw/2020/11/beef-may-be-for-dinner-but-wheres-it-from.html

Of Nuisance, Overtime and Firearms – Potpourri of Ag Law Developments

https://lawprofessors.typepad.com/agriculturallaw/2020/11/of-nuisance-overtime-and-firearms-potpourri-of-ag-law-developments.html

What Farm Records and Information Are Protected from a FOIA Request?

https://lawprofessors.typepad.com/agriculturallaw/2020/12/what-farm-records-and-information-are-protected-from-a-foia-request.html

Can One State Dictate Agricultural Practices in Other States?

https://lawprofessors.typepad.com/agriculturallaw/2020/12/can-one-state-dictate-agricultural-practices-in-other-states.html

SECURED TRANSACTIONS

Family Farming Arrangements and Liens; And, What’s a Name Worth?

https://lawprofessors.typepad.com/agriculturallaw/2020/02/family-farming-arrangements-and-liens-and-whats-a-name-worth.html

Conflicting Interests in Stored Grain

https://lawprofessors.typepad.com/agriculturallaw/2020/03/conflicting-interests-in-stored-grain.html

Eminent Domain and “Seriously Misleading” Financing Statement

https://lawprofessors.typepad.com/agriculturallaw/2020/10/eminent-domain-and-seriously-misleading-financing-statements.html

 

SEMINARS AND CONFERENCES

Summer 2020 Farm Income Tax/Estate and Business Planning Conference

https://lawprofessors.typepad.com/agriculturallaw/2020/02/summer-2020-farm-income-taxestate-and-business-planning-conference.html

Registration Open for Summer Ag Income Tax/Estate and Business Planning Seminar

https://lawprofessors.typepad.com/agriculturallaw/2020/03/registration-open-for-summer-ag-income-taxestate-and-business-planning-seminar.html

 

Summer 2020 – National Farm Income Tax/Estate and Business Planning Conference

https://lawprofessors.typepad.com/agriculturallaw/2020/04/summer-2020-national-farm-income-taxestate-and-business-planning-conference.html

Year-End CPE/CLE – Six More to Go

https://lawprofessors.typepad.com/agriculturallaw/2020/12/year-end-cpecle-six-more-to-go.html

2021 Summer National Farm and Ranch Income Tax/Estate and Business Planning Conference

https://lawprofessors.typepad.com/agriculturallaw/2020/12/2021-summer-national-farm-income-taxestate-business-planning-conference.html

WATER LAW

Principles of Agricultural Law

https://lawprofessors.typepad.com/agriculturallaw/2020/01/principles-of-agricultural-law.html

MISCELLANEOUS

More “Happenings” in Ag Law and Tax

https://lawprofessors.typepad.com/agriculturallaw/2020/02/more-happenings-in-ag-law-and-tax.html

Recent Cases of Interest

            https://lawprofessors.typepad.com/agriculturallaw/2020/03/recent-cases-of-interest.html

More Selected Caselaw Developments of Relevance to Ag Producers

https://lawprofessors.typepad.com/agriculturallaw/2020/03/more-selected-caselaw-developments-of-relevance-to-ag-producers.html

Court Developments of Interest

https://lawprofessors.typepad.com/agriculturallaw/2020/04/court-developments-of-interest.html

Ag Law and Tax Developments

https://lawprofessors.typepad.com/agriculturallaw/2020/05/ag-law-and-tax-developments.html

Recent Court Developments of Interest

https://lawprofessors.typepad.com/agriculturallaw/2020/07/recent-court-developments-of-interest.html

Court Developments in Agricultural Law and Taxation

https://lawprofessors.typepad.com/agriculturallaw/2020/08/court-developments-in-agricultural-law-and-taxation.html

Ag Law and Tax in the Courtroom

https://lawprofessors.typepad.com/agriculturallaw/2020/09/ag-law-and-tax-in-the-courtroom.html

Recent Tax Cases of Interest

https://lawprofessors.typepad.com/agriculturallaw/2020/09/recent-tax-cases-of-interest.html

Ag and Tax in the Courts

 https://lawprofessors.typepad.com/agriculturallaw/2020/11/ag-and-tax-in-the-courts.html

Of Nuisance, Overtime and Firearms – Potpourri of Ag Law Developments

https://lawprofessors.typepad.com/agriculturallaw/2020/11/of-nuisance-overtime-and-firearms-potpourri-of-ag-law-developments.html

Bankruptcy Happenings

            https://lawprofessors.typepad.com/agriculturallaw/2020/12/bankruptcy-happenings.html

January 20, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Sunday, January 17, 2021

Agricultural Law Online!

Overview

For the Spring 2021 academic semester, Kansas State University will be offering my Agricultural Law and Economics course online. No matter where you are located, you can enroll in the course and participate in it as if you were present with the students in the on-campus classroom.

Details of this spring semester’s online Ag Law course – that’s the topic of today’s post.

Course Coverage

The course provides a broad overview of many of the issues that a farmer, rancher, rural landowner, ag lender or other agribusiness will encounter on a daily basis. As a result, the course looks at contract issues for the purchase and sale of agricultural goods; the peril of oral contracts; the distinction between a lease and a contract (and why the distinction matters); and the key components of a farm lease, hunting lease, wind energy lease, oil and gas lease, and other types of common agricultural contractual matters. What are the rules surrounding ag goods purchased at auction?

Ag financing situations are also covered – what it takes to provide security to a lender when financing the purchase of personal property to be used in the farming business. In addition, the unique rules surrounding farm bankruptcy is covered, including the unique tax treatment provided to a farmer in Chapter 12 bankruptcy.

Of course, farm income tax is an important part of the course. Tax planning is perhaps the most important aspect of the farming business that every-day decisions have an impact on and are influenced by. As readers of this blog know well, farm tax issues are numerous and special rules apply in many instances. The new tax law impacts many areas of farm income tax.

Real property legal issues are also prevalent and are addressed in the course. The key elements of an installment land contract are covered, as well as legal issues associated with farm leases. Various types of interests in real estate are explained – easements; licenses; profits, fee simples, remainders, etc. Like-kind exchange rules are also covered as are the special tax rules (at the state level) that apply to farm real estate.

A big issue for some farmers and ranchers concerns abandoned railways, and those issues are covered in the course. What if an existing fence is not on the property line?

Farm estate and business planning is also a significant emphasis of the course. What’s the appropriate estate plan for a farm and ranch family? How should the farming business be structured? Should multiple entities be used? Why does it matter? These questions, and more, are addressed.

Agricultural cooperatives are important for the marketing of agricultural commodities. How a cooperative is structured and works and the special rules that apply are also discussed.

Because much agricultural property is out in the open, that means that personal liability rules come into play with respect to people that come onto the property or use farm property in the scope of their employment. What are the rules that apply in those situations? What about liability rules associated with genetically modified products? Ag chemicals also pose potential liability issues, as do improperly maintained fences? What about defective ag seed or purchased livestock that turns out to not live up to representations? These issues, and more, are covered in the scope of discussing civil liabilities.

Sometimes farmers and ranchers find themselves in violation of criminal laws. What are those common situations? What are the rules that apply? We will get into those issue too.

Water law is a very big issue, especially in the western two-thirds of the United States. We will survey the rules surrounding the allocation of surface water and ground water to agricultural operations.

Ag seems to always be in the midst of many environmental laws – the “Clean Water Rule” is just one of those that has been high-profile in recent years. We will talk about the environmental rules governing air, land, and water quality as they apply to farmers, ranchers and rural landowners.

Finally, we will address the federal (and state) administrative state and its rules that apply to farming operations. Not only will federal farm programs be addressed, but we will also look at other major federal regulations that apply to farmers and ranchers.

Further Information and How to Register

Information about the course and how to register is available here:  https://www.enrole.com/ksu/jsp/session.jsp?sessionId=442107&courseId=AGLAW&categoryId=ROOT

You can also find information about the text for the course at the following link:  https://washburnlaw.edu/practicalexperience/agriculturallaw/waltr/principlesofagriculturallaw/index.html

If you are an undergraduate student at an institution other than Kansas State, you should be able to enroll in this course and have it count as credit towards your degree at your institution.  Consult with your academic advisor to see how Ag Law and Economics will transfer and align with your degree completion goals.

If you have questions, you can contact me directly, or submit your questions to the KSU Global Campus staff at the link provided above.

I hope to see you in class beginning on January 26!

January 17, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)

Friday, January 8, 2021

Continuing Education Events and Summer Conferences

Overview

There are a couple of online continuing education events that I will be conducting soon, and the dates are set for two summer national conferences in 2021. 

Upcoming continuing education events – it’s the topic of today’s post.

Top Developments in Agricultural Law and Tax

On Monday, January 11, beginning at 11:00 a.m. (cst), I will be hosting a two-hour CLE/CPE webinar on the top developments in agricultural law and agricultural taxation of 2020.  I will not only discuss the developments, but project how the developments will impact producers and others in the agricultural sector and what steps need to be taken as a result of the developments in the law and tax realm.  This is an event that is not only for practitioners, but producers also.  It’s an opportunity to hear the developments and provide input and discussion.  A special lower rate is provided for those not claiming continuing education credit.

You may learn more about the January 11 event and register here:  https://washburnlaw.edu/employers/cle/taxseasonupdate.html

Tax Update Webinar – CAA of 2021

On January 21, I will be hosting a two-hour webinar on the Consolidated Appropriations Act, 2021.  This event will begin at 10:00 a.m. (cst) and run until noon.  The new law makes significant changes to the existing PPP and other SBA loan programs, CFAP, and contains many other provisions that apply to businesses and individuals.  Also, included in the new law are provisions that extend numerous provisions that were set to expire at the end of 2020.  The PPP discussion is of critical importance to many taxpayers at the present moment, especially the impact of PPP loans not being included in income and simultaneously being deductible if used to pay for qualified business expenses.  Associated income tax basis issues loom large and vary by entity type.

You may learn more about the January 21 event and register here:  https://agmanager.info/events/kansas-income-tax-institute

Summer National Conferences

Mark your calendars now for the law school’s two summer 2021 events that I conduct on farm income tax and farm estate and business planning.  Yes, there are two locations for 2021 – one east and one west.  Each event will be simulcast live over the web if you aren’t able to attend in-person.  The eastern conference is first and is set for June 7-8 at Shawnee Lodge and Conference Center near West Portsmouth, Ohio.  The location is about two hours east of Cincinnati, 90 minutes south of Columbus, Ohio, and just over two hours from Lexington, KY.  I am presently in the process of putting the agenda together.  A room block will be established for those interested in staying at the Lodge.  For more information about Shawnee Lodge and Conference Center, you made click here:  https://www.shawneeparklodge.com/

The second summer event will be held on August 2-3 in Missoula, Montana at the Hilton Garden Inn.  Missoula is beautifully situated on three rivers and in the midst of five mountain ranges.  It is also within three driving hours of Glacier National Park, and many other scenic and historic places.  The agenda will soon be available, and a room block will also be established at the hotel.  You may learn more about the location here:  https://www.hilton.com/en/hotels/msogigi-hilton-garden-inn-missoula/

Conclusion

Take advantage of the upcoming webinars and mark you calendars for the summer national events.  I look for to seeing you at one or more of the events.

January 8, 2021 in Bankruptcy, Business Planning, Civil Liabilities, Contracts, Cooperatives, Criminal Liabilities, Environmental Law, Estate Planning, Income Tax, Insurance, Real Property, Regulatory Law, Secured Transactions, Water Law | Permalink | Comments (0)