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2014

Agriculture

Agricultural Law Digest

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Full-Text Articles in Life Sciences

Cases, Regulations And Statutes, Robert P. Achenbach Jr Dec 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


Index To Volume 25, Agricultural Law Digest Dec 2014

Index To Volume 25, Agricultural Law Digest

Agricultural Law Digest

No abstract provided.


Uniform Basis: Who Can Claim Depreciation After Death And How Much?, Neil E. Harl Dec 2014

Uniform Basis: Who Can Claim Depreciation After Death And How Much?, Neil E. Harl

Agricultural Law Digest

Leaving property at death to the surviving spouse for life (a legal life estate or a life estate in trust) with a remainder interest to a child or children has been a fairly common strategy and continues to be used even with the larger applicable exclusion amount1 and “portability” (which allows the surviving spouse to use the unused applicable exclusion amount at the death of the first spouse to die if the requirements are met).2 One important issue is how is the income tax basis handled under the “uniform basis” rules? What happens if the holder of the life ...


Cases, Regulations And Statutes, Robert P. Achenbach Jr Nov 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


Another Slant To Co-Ownership Discounts, Neil E. Harl Nov 2014

Another Slant To Co-Ownership Discounts, Neil E. Harl

Agricultural Law Digest

A decision by the Fifth Circuit Court of Appeals in 2014, Elkins v. Commissioner1 involving co-ownership of art collections has added another chapter to the saga of coownership discounts.2 Although other courts have allowed discounts for the costs of partition and sale, the courts generally have been reluctant to allow more than a token discount for a fractional interest itself in art works.3 The Elkins case4 allowed a 44.75 percent discount for undivided interests in works of art and a 10 percent discount for restrictions on transferability.5 An earlier Ninth Circuit case approved a token five ...


When A Small Foundation Becomes A “Private Foundation”, Neil E. Harl Nov 2014

When A Small Foundation Becomes A “Private Foundation”, Neil E. Harl

Agricultural Law Digest

With the increase in wealth in rural areas in recent years has come the growth in non-profit organizations, often organized as family entities to assist in perpetuating some feature of rural life. The focus may be on the local schools; colleges or universities, often in the form of scholarships; the local church; soil conservation; the local community itself or any one of a number of other family concerns. Most are organized as corporations under state law and have sought (and usually obtained) federal status to operate “. . . for religious, charitable, scientific, testing for public safety, literary or educational purposes. . . “ along with ...


Cases, Regulations And Statutes, Robert P. Achenbach Jr Nov 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


Cases, Regulations And Statutes, Robert P. Achenbach Jr Oct 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


The Eighth Circuit Court Of Appeals Reverses The Tax Court In Morehouse V. Commissioner, Neil E. Harl Oct 2014

The Eighth Circuit Court Of Appeals Reverses The Tax Court In Morehouse V. Commissioner, Neil E. Harl

Agricultural Law Digest

No abstract provided.


Cases, Regulations And Statutes, Robert P. Achenbach Jr Oct 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


Accounting Options And Limits For Farming And Ranching Entities, Neil E. Harl Oct 2014

Accounting Options And Limits For Farming And Ranching Entities, Neil E. Harl

Agricultural Law Digest

Recent discussions in Congressional Committees to limit or prohibit cash accounting in farm and ranch operations has generated considerable discussion.1 On March 12, 2013, the Committee on Ways and Means of the United States House of Representatives issued a discussion draft of suggested ways to reform accounting practices used by small businesses.2 Section 212 of the discussion draft suggested eliminating the use of cash accounting for farmers with gross receipts of more than $10,000,000 which would affect farming and ranching operations structured as partnerships (including LLCs and LLPs) and S corporations as well as sole proprietorships ...


Cases, Regulations And Statutes, Robert P. Achenbach Jr Oct 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


Handling A “Split-Interest” Arrangement With A Life-Estate Preceding A Charitable Remainder For Farms And Personal Residences, Neil E. Harl Oct 2014

Handling A “Split-Interest” Arrangement With A Life-Estate Preceding A Charitable Remainder For Farms And Personal Residences, Neil E. Harl

Agricultural Law Digest

The rapid run-up in farm and ranch real estate values in recent years has resulted in some property owners considering a charitable contribution but often with a life estate for the surviving spouse.1 That result was made possible by an amendment in the Tax Reform Act of 1969.2 Such a plan can be implemented rather simply with a legal life estate followed by a remainder interest to the charitable organization.


Managing Life Insurance Trusts, Neil E. Harl Sep 2014

Managing Life Insurance Trusts, Neil E. Harl

Agricultural Law Digest

Life insurance trusts continue to play an important role in farm estate and business planning although perhaps not to the extent that was the case several years ago.1 The expanded applicable exclusion amount2 for federal estate tax and gift tax purposes ($5,340,000 for deaths or gifts in 2014) and the availability of portability3 on a permanent basis (which can effectively double the applicable exclusion amount for married couples) lessens the pressure to distance one’s self from property to reduce or eliminate federal estate tax at death. Nonetheless, such trusts entered into over the past several years ...


Cases, Regulations And Statutes, Robert P. Achenbach Jr Sep 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


The Latest Chapter In The Baur Saga, Neil E. Harl Sep 2014

The Latest Chapter In The Baur Saga, Neil E. Harl

Agricultural Law Digest

The Iowa Supreme Court case of Baur v. Baur Farms, Inc.,1 which was reversed and remanded to the District Court “for further proceedings consistent with [the Supreme Court] opinion,” has produced yet another opinion,2 which is far from “consistent with [the Supreme Court ] opinion.”3 The long saga of the Baur disputes is, very likely, far from over. The Iowa Supreme Court decision had held that “. . . majority shareholders act oppressively when, having the corporate financial resources to do so, they fail to satisfy the reasonable expectations of a minority shareholder by paying no return on shareholder equity while ...


Cases, Regulations And Statutes, Robert P. Achenbach Jr Sep 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


Advantages Of The Gallenstein Rule And How To Apply It, Neil E. Harl Aug 2014

Advantages Of The Gallenstein Rule And How To Apply It, Neil E. Harl

Agricultural Law Digest

The advantages of the rule that has come to be known as the Gallenstein rule1 are clear for many farm and ranch estates. That is almost a certainty for estates where real property was purchased after 1954 and before 1977 with title taken in joint tenancy or tenancy by the entirety (with that co-ownership maintained until the death of the first joint tenant to die), the joint tenant who was the first to die provided more than half of the consideration when the property was purchased and the mortgage, if any, was paid off and there would be an advantage ...


Cases, Regulations And Statutes, Robert P. Achenbach Jr Aug 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


Post-Death Cash Renting With Special Use Valued Real Estate, Neil E. Harl Aug 2014

Post-Death Cash Renting With Special Use Valued Real Estate, Neil E. Harl

Agricultural Law Digest

The statute creating special use valuation for real property as enacted in 1976 effective in 19771 did not permit cash rent leasing in the after-death period2 except for the two year “grace period” immediately after death3 for purposes of further meeting the “qualified use” test (which was enacted in 1981).4 However, that requirement has been modified twice, once in 1988 and once in 1997 as discussed below, and made retroactive to 1976.5


Cases, Regulations And Statutes, Robert P. Achenbach Jr Aug 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


Cases, Regulations And Statutes, Robert P. Achenbach Jr Jul 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


Installment Sale With Section 121 Exclusion Followed By Repossession, Neil E. Harl Jul 2014

Installment Sale With Section 121 Exclusion Followed By Repossession, Neil E. Harl

Agricultural Law Digest

A 2014 Tax Court case, DeBough v. Commissioner,1 has clarified the handling of an installment sale transaction involving the sale of a principal residence where the buyer defaulted with the property repossessed by the original seller.2 The decision places a premium on acting promptly to resell after repossession if the Section 121 exclusion has been applied in the original transaction.3 The income tax consequences of the repossession can be significant if resale is delayed for more than a year.4


Final Regulations On Giving Tax Advice, Neil E. Harl Jul 2014

Final Regulations On Giving Tax Advice, Neil E. Harl

Agricultural Law Digest

In what is candidly referred to in the Preamble as an effort to “. . . replace rigid rules for written tax advice with more flexible rules and eliminate the necessity to provide disclaimers in certain written tax advice. . .,” the final regulations issued under T.D. 96681 “. . . reduce the burden imposed on small entities that issue written tax advice.” The final regulations follow proposed regulations which were issued on September 17, 2012.2 In general, the final regulations are expected to be welcomed by tax practitioners as a step toward more reasonable rules for providing written advice to clients and others.


Cases, Regulations And Statutes, Robert P. Achenbach Jr Jul 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


Uncertainty Over Interpretation Of The Unearned Income Medicare Contribution Tax, Neil E. Harl Jun 2014

Uncertainty Over Interpretation Of The Unearned Income Medicare Contribution Tax, Neil E. Harl

Agricultural Law Digest

As should have been expected when a new tax is enacted that does not track the contours of tax legislation then in place, the interpretation of the numerous provisions is likely to trigger numerous questions of who must pay the new tax.1 Although the 3.8 percent tax is paid, beginning in 2013, only by couples filing a joint return or a surviving spouse who earn more than $250,000 ($125,000 for married taxpayers filing separately) and $200,000 for other taxpayers,2 the additional tax burden has not gone unnoticed. As is often the case, the greater ...


Cases, Regulations And Statutes, Robert P. Achenbach Jr Jun 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


Cases, Regulations And Statutes, Robert P. Achenbach Jr May 2014

Cases, Regulations And Statutes, Robert P. Achenbach Jr

Agricultural Law Digest

No abstract provided.


Watch Intra-Family Financial Transactions, Neil E. Harl May 2014

Watch Intra-Family Financial Transactions, Neil E. Harl

Agricultural Law Digest

Rapidly rising farmland values1 and rising farm incomes have had a major impact on family relationships. One notable effect has been on perceptions of fairness based on estate and business plans originating in an earlier era, as recently discussed in these pages.2 Another, of nearly equal importance, involves financial assistance within families that may balloon with higher input costs and higher machinery costs as the younger generation strives to adjust to a new level of both income and expenses. Financial assistance by parents (or grandparents) to the farming generation may have seemed reasonable a few years ago but may ...


Handling Passive Activity Gains And Losses, Neil E. Harl May 2014

Handling Passive Activity Gains And Losses, Neil E. Harl

Agricultural Law Digest

Even though the legislation was enacted 28 years ago, in 1986,1 the rules governing the handling of passive activity gains and losses have remained a bit of a mystery for some tax practitioners when it comes to applying the rules to specific fact situations.2 Moreover, the shift in thinking on the part of the Internal Revenue Service as to how to view limited liability companies (LLCs) and, quite likely, other newly minted entities created in recent years, has contributed to the mystery. This article reviews the basic rules drawn from the 1986 legislation as likely to be applied ...