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The IRS has cooked up a special mix of fun to generate more revenue. First, they have reduced accelerated depreciation limits to $25,000 and Second, have tightened their position on what is a repair (which is a current year expense and what is a capital improvement which has to be deducted over time). It is enough to drive you to drink, which is why it is referred to as the BAR test. (Betterment, adaption and restoration). If the fix does any of those things, it needs to be depreciated out slowly instead in the year incurred. Betterment = fixes a condition or defect that existed before the purchase of the property, is  a material addition to the property; or increases the property's productivity, efficiency, strength, etc. Adaption =a change a new or different use if   of property to a use from what you bought the property for Restoration. =  puts the property back in working order from non function or rebuilds the property to a like new condition or replaces a major component or structure of the property.

Oil Changes, filter changes and the like which happen more than once during the life span of the item are still allowed as current year expenses.
Don't be surprised if your tax preparer asks more questions this year about your repair category. It would appear that with the recent passage of a higher accelerated expense provision, this issue may not be as critical, as a tax payer maybe able to elect to treat what would be BAR repairs as accelerated expenses.

Who wins with crop insurance?

The company's selling the policies sure do. According to a recent white paper: 'As a result of the significant subsidies crop insurance corporations receive, they consistently generate profits that are considered far above the reasonable rate of return as calculated by economic experts. Between 1989 and 2009, crop insurance companies averaged a 17% return on equity at a time when the 'reasonable' rate was under 13%, according to an analysis done for the USDA. In 2009 alone, crop insurers enjoyed an astounding 26% rate of return, more than double what was considered reasonable by the industry standard for that year.'"

Questions to Ask About Your Data Privacy Policy

Mapping via infrared spectrum at the one inch level on a field is technology that is already here. The foreign ag service has been using satellite images to predict competing countries yields for decades. That technology is getting cheaper and easier to acquire for private use. Tractors and combines are routinely in communication with GPS locators and mapping programs as farms become more technically advanced. The data that is captured can be used for many purposes.

Pat Dillon

Customizing tractors and other farm equipment is not a new idea, infact with some farm operators it is as common as free seed corn caps. I have a Farmall C with a “reverse kit” installed so you face the traditional “rear” of the tractor. Then, a forklift mast was installed. International Harvester company didn’t do that, a short line manufacturer saw a need and met it. I remember my Dad taking the frame of a Massey Harris pull type 72 combine and making into a trailer to haul a D4 Bulldozer and taken the grain head and fabricating a grain cleaner from it.

Now, the tinkering and tweaking extends to the electronic components of the equipment. Chips are available to deregulate horsepower controls, wiring harnesses and programs can be uploaded to equipment in an attempt to make on manufacture’s electronics “talk” to another. The manufactures install Technology Protection Measures or TPM to prevent this tinkering. This reminds me of the manufactures making their hydraulic systems incompatible with one another, which you can still find traces of with Pioneer adaptors on IH tractors.

Over the last twenty years manufacturers have used the 1998 Digital Millennium Copyright Act to assert that buyers have permission (aka a license) to use software that in the equipment sold and that permission doesn’t include the right to tinker with the software. This month U.S. Copyright Office is supposed to rule to clarify how much of piece of equipment’s soft ware you can modify. As it stands, the manufacturers have the law on their side and 120 years of protection from modification of the software. From the on board navigation system in your new SUV to the GPS and the electrical harness of your tractor, this ruling will have a broad impact. However, just like the Waters of the United States rule, the “clarification” is likely going to mean more money for patent lawyers and more gray areas. And gray areas slow innovation and new ideas as lawyers file briefs and motions.

GM, Deere, and others are claiming that without the rules being interpreted their way, they would suffer economic loss through pirating of hard work and research they put into the product, as well increased risk of responsibly in the event of an accident, increased emissions, or poor performance. But 120 years of protection seems along time. Mr

Pop Quiz… Name the only segment of the economy with a division of government devoted to it.  The answer is agriculture. From the regulation of food preparation to the use of food aid as a foreign policy tool, agricultural and the laws surrounding it impacts all of us whether we like to admit it or not.

The term agricultural law may not as common as personal injury law  or divorce law , but make no mistake, agriculture and the law are forever intertwined. It naturally follows that where government is, so will be the lawyers advocating for their client. Much like a farmer, an agricultural lawyer in rural Iowa has to know a little bit about of lot of things related to agricultural law and be willing to know when it is time to get a dedicated specialist. This column will touch on the various segments of agricultural law trends and identify the potential impact on members of the northeast Iowa farm community.

Estate planning, business planning, government farm policy and taxation readily come to mind as legal issues facing the farm community. However, food safety regulations, interpretation of federal pesticide laws, land use regulation decisions and foreign food aid policy have an impact on our local community, often time without knowledge until far after the decisions have been made. For example, one decision by the Supreme Court  applied the government's right of eminent domain to allow a city to take a private citizen's land and after paying for it, turn the seized property over to another private citizen who put it to use for profit.  In the struggle between expanding urban population centers and agricultural land owners, this precedent could be used to the detriment of land owners.  

It is good to see the government in action and stopping excesses, a fresh prospective if you will, following the ugly election cycle we are just exiting. These are summaries of ethical and legal issues that member of the Ag community who work for the Federal government have been caught in recent years from the Pentagon's Encyclopedia of Ethical Failures.  Yes, that is a real document handled by the Department of Defense's Standards and Conduct Office.

Agriculture Employee Sought for Approving Fraudulent Loans

A former employee of the Department of Agriculture is wanted for recruiting his friends to fraudulently apply for farm loans and then giving him money in exchange for approving the loans.  The former employee helped his non-farmer co-conspirators to fill out the required forms with the information required for approval.  Under this scheme, the former employee approved loans totaling $1.8 million.  He collected $340,000 for himself. The former employee has been charged with 98 counts including 56 for bribery. Federal sentencing patterns suggest that he is facing a long time in the federal criminal system. The loan applicants also likely face a dim, non farming future.

Seven Agriculture Inspectors Sentenced for Bribery Scheme

Seven U.S. Department of Agriculture fruit and vegetable inspectors were convicted of operating a scheme in which they received cash payments from fruit and vegetable wholesalers in return for the inspectors assigning lower grades to their produce.  The lower grade meant that the wholesaler could pay the grower a lower price for the produce and then re-sell it at the higher grade.
All pled guilty to one count of bribery each.  Bribery occurs when a public official seeks or accepts anything of value (such as cash) in return for being influenced in the performance of an official act (such as assigning produce grades).

Monday, May 27, 2024
  • Patrick B. Dillon
  • Jill Dillon
  • Tori Beyer
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 is a University of Northern Iowa undergraduate (Political Science Cum Laude) and a Drake University Law School graduate. Jill is a firm owner but not currently accepting private pay clients. Jill still has ties to her family farm operation which includes a dairy herd.
Dillon Law PC
Tori is a University of Iowa undergraduate where she double majored in Criminology, Justice, and Law and Ethics and Public Policy and a North Dakota Law School graduate. Tori practices in the Sumner office. Tori's areas of practice include but are not limited to estate planning, wills/probate, criminal defense, and civil litigation.

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