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Ryan D Walker
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A recent case from North Carolina points out that some thoughtful planning of a trust's situs can make a significant tax difference. The reason is that state tax rates differ, and some states don't have an income tax. So, for those clients that have the right set of facts, tax... Continue reading
Posted Dec 18, 2018 at My Blog
A couple of recent cases indicate that simply because a pesticide is registered doesn't mean that the pesticide might be misbranded. Generally, the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) provides that once the Environmental Protection Agency (EPA) registers a pesticide and approves its label, state label-based claims are preempted.... Continue reading
Posted Dec 18, 2018 at My Blog
The U.S. House Ways and Means Committee has released a “Blueprint for Pro-Growth Tax Reform” that has some possible implications for agriculture. The Blueprint reveals a flat tax rate of 25 percent on business income, with a 20 percent corporate rate applicable to C corporations. It also appears that the... Continue reading
Posted Dec 18, 2018 at My Blog
Section 167(h) of the I.R.C. says that a taxpayer can write-off (over 24 months) “geological and geophysical expenses paid or incurred in connection with the exploration for, or development of, oil or gas.” I.R.C. §167(h)(1) retains that language and then adds that the expenses must be incurred in the United... Continue reading
Posted Dec 18, 2018 at My Blog
Facts The defendant was an executive (in the capacity of a trustee of the trust that owned the company) of a large-scale egg production company in Iowa, and his son was the Chief Operating Officer of the company. They both pled guilty as “responsible corporate officers” to misdemeanor violations of... Continue reading
Posted Dec 18, 2018 at My Blog
A recent Chapter 12 (farm) bankruptcy case highlights an issue that farmers can run into when in financial distress. In recent years, the expansion of the size of farm and ranch operations (due largely to increased crop prices and land values) caused some many farming operations to expand. It also... Continue reading
Posted Dec 18, 2018 at My Blog
A common arrangement between cattlemen and feedlots generated a court case recently involving the rights to the proceeds of the sale of the cattle. Under the facts of the case, a cattle feedlot financed the debtor’s purchase of cattle from a third party (cattle seller) through a lender. The debtor... Continue reading
Posted Dec 18, 2018 at My Blog
Many farmers view insurance as a necessary “evil,” whether it be life insurance, disability insurance, crop insurance or insurance covering livestock losses, just to name a few. With insurance, it is absolutely critical that the contract language be read and understood and that any lack of understanding of policy language... Continue reading
Posted Dec 18, 2018 at My Blog
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 45 percent. Valuation discounting has proven to be a very effective strategy for... Continue reading
Posted Dec 18, 2018 at My Blog
Two self-employment tax issues affecting farmers and ranchers have been in the forefront in recent years – the self-employment tax treatment of Conservation Reserve Program (CRP) payments and the self-employment tax implications of purchased livestock that had their purchase price deducted under the de minimis safe harbor of the capitalization... Continue reading
Posted Dec 18, 2018 at My Blog
A recent Tenth Circuit Court of Appeals opinion provides some good teaching points that tend to get forgotten or come as a surprise. The petitioner was a CEO of a computer company, and didn’t have any specialized knowledge or expertise in oil and gas ventures. In the 1970s, he acquired... Continue reading
Posted Dec 18, 2018 at My Blog
One of the situations that a particular farmer or rancher may face in which they will be limited in their ability to sue a manufacturer on a product liability claim involves damages arising from the use of registered pesticides. The Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) authorizes the Environmental... Continue reading
Posted Dec 18, 2018 at My Blog
When a business (including an agribusiness or farm operation) buys an asset that has a useful life of more than a year, the business gets to depreciate the asset’s cost over its life in order to recover the asset’s gradual deterioration or obsolescence. If the business later sells the depreciated... Continue reading
Posted Dec 18, 2018 at My Blog
Land ownership includes two separate estates in land – the surface estate and the mineral estate. The mineral estate can be severed from the surface estate with the result that ownership of the separate estates is in different parties. In some states, the mineral estate is dominant. That means that... Continue reading
Posted Dec 18, 2018 at My Blog
An issue that we have been teaching at farm tax seminars this spring and summer (and, for me, at the farm income tax course at Washburn Law School this past May) involves new I.R.C. §168(k)(5) which was added to the Internal Revenue Code by “The Protecting Americans From Tax Hikes... Continue reading
Posted Dec 18, 2018 at My Blog
One of the issues of interest at the farm income tax seminars in North Dakota last week involved how to report crop insurance proceeds on the tax return. This was particularly the case at the Grand Forks seminar because the sugar beet crop in that area and points north has... Continue reading
Posted Dec 18, 2018 at My Blog
Agriculture is subject to some significant environmental regulation. That fact has become a recent focus of some of the political debate in this fall’s Presidential campaigns. Two of the “biggies” at the federal level are the Clean Water Act (CWA) and the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).... Continue reading
Posted Dec 18, 2018 at My Blog
The donation of a permanent conservation easement on farm or ranch land can provide a significant tax benefit to the donor. The rules are complex and must be carefully complied with to obtain the tax benefits that are possible – farmers and ranchers can deduct up to 100 percent of... Continue reading
Posted Dec 18, 2018 at My Blog
The turn of the calendar to September lets us know that fall is just around the corner. For some rural landowners, that means that various activities will occur where members of the public will be invited to the premises to engage in various activities such as hayrides, corn mazes, and... Continue reading
Posted Dec 18, 2018 at My Blog
I field a lot of questions involving farm income tax issues. Sometimes those questions involve the proper treatment of income received from various farm-related activities. Today I take a look at a few of those common questions involving breeding fees, mineral and soil sales, crop share rents, livestock sales, and... Continue reading
Posted Dec 18, 2018 at My Blog
Historically, the I.R.C. §179 election was required to be made as part of a timely filed return. No revocations of the election, once it was made, were allowed without IRS consent. However, in 2003, the Congress enacted I.R.C. §179(c)(2) to permit taxpayers to revoke the I.R.C. §179 election on an... Continue reading
Posted Dec 18, 2018 at My Blog
After 25 years of working with agricultural producers, there are some common mistakes or misunderstandings that I have noticed that farmers and ranchers (and others) have when it comes to estate planning. I have also noticed some common errors in estate plan that may or may not be related to... Continue reading
Posted Dec 18, 2018 at My Blog
A bankruptcy reorganization plan may be modified, at the request of the debtor, the trustee or the holder of an unsecured claim, at any time after confirmation of the plan and before completion of payments. 11 U.S.C. §1229(a). A modification enables the debtor to make adjustments to financial obligations when... Continue reading
Posted Dec 18, 2018 at My Blog
I often field questions that concern farm real estate legal and tax issues. It seems as if some of the more frequent real estate-related questions that have come up recently concern steps that can be taken to ensure that a farm land purchase goes through and that nothing unexpected occurs... Continue reading
Posted Dec 18, 2018 at My Blog
An aspect of estate and business planning for farmers and ranchers (and other small businesses) that has popped-up since the enactment of the health care law in 2010, includes planning to minimize the impact of the Net Investment Income Tax (NIIT). Often, clients have a desire to simultaneously minimize self-employment... Continue reading
Posted Dec 18, 2018 at My Blog