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Laws are designed to generate revenue of the crown, provide for the common good, and make us behave or not behave in certain matters. In the end, that is what government is supposed to do.Recently, the Iowa statehouse has been busy deciding how they want the rest of us to behave.

Probate costs:
Last year, proposed legislation was suggested to address the inconsistency among judicial districts of assessing court costs on probate assets. The way the matter lies now, depending on what part of Iowa you die in, some assets are charged a probate fee and the same assets in a different part of the state is not  Additionally, the bill addressed the taxation of costs on assets that require no judicial administration, such as POD accounts, joint property, etc.  Because a bill that might stop the state from getting its paws on your funds when you are dead isn't popular in all circles (to the tune over $12 million in funds), it has died prior to the funnel date.  However, this year, a bill was introduced that would rectify the inconsistent treatment of Iowan's dying on or after January 1, 2017.   Unless you know you are going to live until 1 Jan 2017, this short changes you. However, all legislation is deal making, and a mostly fair solution is better than a truly fair solution that never sees the light of day. This mostly fair bill is in the Ways and Means committee on both sides of the legislature.

Communicate with your local State Representatives and Senators  and additionally to communicate with all members of the House and Senate Ways and Means Committee urging them to approve and pass HSB 645 and SSB 3174.

Members of the Senate Ways & Means subcommittee for SSB 3174  are:
 
Rob Hogg  (This email address is being protected from spambots. You need JavaScript enabled to view it.)
Bill Anderson (This email address is being protected from spambots. You need JavaScript enabled to view it.)
Matt McCoy (This email address is being protected from spambots. You need JavaScript enabled to view it.)
 
Members of the House Ways & Means subcommittee for HSB 645 are:
 
Chip Baltimore  ((This email address is being protected from spambots. You need JavaScript enabled to view it.)
Dawn Pettengill (This email address is being protected from spambots. You need JavaScript enabled to view it.)
Todd Prichard (This email address is being protected from spambots. You need JavaScript enabled to view it.)
 
 
Land ownership THE STATE WANTs IN ON YOUR FAMILY DIPSUTE

Representative Bill Dix introduced a bill that would require people who inherit land jointly from their parents to be forced to offer their parcel for sale to the co tenant prior to offering it to a 3d party. The bill then went on to establish what and how a fair price would be determined.  Luckily, this bill died. It is offensive to me that the state can interfere with how a person decides to value and sell their property.  Especially when the bill could be applied to people who inherited it from their parents that had NO IDEA that the state would ever set a method on how their property would bevalued.

In estate planning, lots of times, brothers and sisters end up in co ownership of property. Being forced into business with your sibling is a nightmare for some and a welcome co partner for others. Regardless, that is a property right that having the state stick their nose into is , at most charitiably put, none of their business. The law already has a relief provision for co-owners that don't  want to be co-owners, it is call partition and it seems to work just fine.

Tax Relief Guess what the law will be before we pass it and you might win or you might not. Nothing like changing the tax law for 2015 in the last weeks of March 2016, yet that is exactly what the legislature did. While the federal congress acted slowly in making the accelerated expense deduction rules permanently at the higher amount that it had been annually authorizing for the last several years before the end of 2015, Iowa did not. Iowa debated and him hawed around until Mid-March to retroactively move to allow the larger deduction amount on the state return. March is after the federal deadline to file for farmers who want to avoid underpayment penalties. As a result, farmers who gambled that Iowa would eventually allow more than the $25,000 limit were forced to chose between filing federally but waiting to file Iowa (because Iowa did pass an extension 2 days before its 1 March deadline), filing Iowa using the lower amount and amending later or filing Iowa with the lower amount and carrying two sets of depreciation schedules into tax year 2016, one for Federal purposes with an expensed out item and another for State purposes with the item still having a cost basis to deduct over the next years.

The result of that dithering is extra payment to the farm tax preparer. Many tax professionals invested client's time and money to determine what the best course of action might be for their clients. With the looming low prices and trending lower farm commodity prices, perhaps having a deduction in the years to come will not be such a bad thing. But as a policy tool, this is the worst type of law, as it doesn't even trigger behaviors (like buy more equipment to deduct) because the law is passed retroactively and is only good for 2015. 2016 looks to be more similar shenanigans with no one really knowing what the legislature wants to see happen from a policy standpoint.

Sunday, July 12, 2020
  • Patrick B. Dillon
  • Jill Dillon
Dillon Law PC
Patrick B. Dillon enjoys finding solutions to legal issues and catching problems for clients. Pat practices in the Sumner office regularly represents clients in district, associate district and magistrate courts for agricultural, real estate, criminal and collection issues. He drafts wills and trusts, creates estate plans and helps clients through the probate process.
Dillon Law PC
Jill Dillon focuses on family law, estate planning and IRS matters. Jill is a University of Northern Iowa undergraduate (Political Science Cum Laude) and a Drake University Law School graduate. Jill spent extensive time advocating for low income tax payers in front of the IRS and the State of Iowa Department of Revenue while at Drake.

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