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Thanks to Todd Janzen, @janzenlaw,  for pointing out these data related issues in ag:

Feel Free to Hack your Tractor John Deere's claim to  US Copyright Office cl:  aiming that it licenses tractor  software to farmers caused WIRED magazine claim that John Deere owns your tractor.  The US Copyright Office  decided that farmers should be able to repair and modify their tractor's software, in spite of copyright protection.  SO WIRED got it wrong along with John Deere.

On the bigger issue of ag data ownership:

Companies are forming now to advise landowners on the best possible rental rates for their investment based on yield, soil and other data. It is commonly referred to as Ag Data.  Having access to that data will be the difference between a company that provides value and one that only provides snake oil and herbal based remedies.The concept of ag data "ownership" is not recognized by United States law.  Farmers like to say "I own my ag data."  Ag technology companies like to say "the farmer owns their data." And you need a release to get it.  And the industry representatives like to say "the farmer should down their data."  But the reality is that "ownership" is a legal principle that must be recognized by courts or a law, and that has not yet happened in the United States for ag data.

Ownership-the right of possession, use, control, and to exclude others of the same-has long been classified different ways in the United States depending on what type of property is being "owned."  The courts recognize   three forms of property.

Real Property.  As much as I don' t like anything English, the  Courts in England granted an owner of real property a number of rights, such as the right to exclude others, and the right grant others a lesser estate (such as tenancy) in land. That is where the term landlord comes from, though I am on a mission to replace it with landowner.

Personal Property. Personal property can be more easily transferred or shared than real property.  Things like cars, horses, cattle and paper are personal property. So might be a chicken shed on skids. Should a shed stay when a lease ends or should the tenant be allowed to take it with him? The answer depends on whether it is "real" or "personal" property. Personal property is generally movable while real property is not.

Some of the major ag issues in Iowa were not resolved.

Clean Water or WOTUS rule is facing several challenges by farm and industry groups and environmental groups. No stake holder appears to be happy with the EPA's proposed interpretation and rules. Those rules are on hold while the litigation take place. It is likely a dispute that will fall at the feet of the United States Supreme Court before it is all said and done.

Iowa Water Works.  Not to be left out of the conversation, the Des Moines Waterworks sued upper Iowa Counties alleging nitrate discharges are damaging the Des Moines Water Works ability to supply clean water. The parties are waiting on a ruling from a Polk County Judge regarding portions of the case.

Dakota Pipeline: The crude oil pipeline that is proposed to cut through the state of Iowa needs court authority to get the last 25% of the land it needs to complete its project. It is asking the court to force the sale of those last parcels through a process called eminent domain. Iowa does not have much case law on the value to the public of a private oil line so this court ruling will not likely be the end of the matter.

Rock Island Clean Line:  This is  a proposal for a an energy line that cuts through Iowa. Like the oil line above, it needs help from the courts to take the land it needs to complete the project. Infact, last count it would appear greater than 80% of the land required has not be voluntarily purchased or obtained.

While death is the ultimate tax dodge, Congress recently provided some long term fixes to some rather helpful provisions of the tax code that quite frankly, a lot of businesses are hooked on using like crack cocaine. That of course, is exactly what Congress intended. After all, once they have you hooked, you are more likely to behave as intended.
Section 179 Deduction- The Good Crack

Enhanced "Section 179" deduction, or expense method depreciation is something that most business love. It allows items that would normally be required to be deducted slowly over many years, to be treated like a purchase of a bag feed that is consumed in a short amount of time.   Now  under I.R.C. § 179, the section allows farmers and  businesses to deduct $500,000  of certain business property or equipment during the year in which the property was placed into service.  It used to be $25,000. That's a big jump.  Future amounts will be indexed for inflation. True, last year the Congress did the same thing, but this time, it is scheduled to last for a couple of years, which will allow for greater planning and less made dashes to the equipment dealer on 28 DEC.

Farmer can use §179 deduction to purchase machinery and equipment, office equipment, livestock, grain bins, and single purpose agricultural structures such as hog barns or under roof calving barns. The deduction applies to purchases of new or used equipment. To use deduction for the 2015 tax year, the purchase must have been placed in service in 2015 - ready for use .

Other items to induce action on your part.

The new bill also  extends several frequently renewed credits for individuals. These include the enhanced child tax credit ($1,000 per qualifying child), the enhanced earned income tax credit, and the enhanced American Opportunity Tax Credit ($2,500 for four years of college expenses). Congress has also made permanent a provision granting teachers a $250 deduction( indexed for inflation) for supplies purchased for their K-12 classrooms.    Now you can also elect to claim state and local sales tax instead of state and local income tax as an itemized deduction. Although this provision generally benefits those taxpayers from states without a state or local income tax (We are looking at you Washington State), it can also benefit taxpayers who make a large purchase in a given tax year.

Also charitable giving is getting some love. Tax payers over70.5 years old can  make tax free distributions from their IRAs to a qualified charity. Up $100,000 per taxpayer (per spouse for married taxpayers that file as married filing jointly) .

Some things to remember: First, permanent means until Congress decides to mess with the code again. Second, all tax provisions are designed to induce or prevent behaviors. Look again at the provisions discussed above. They might as well be titled "Buy more stuff provision," "The have more children act", "the go to school act", "Teachers  please keep buying supplies yourself instead of asking for a raise measure"  and "you saved too much so share it with a charity provision."

Six years ago, I had to be convinced to get a smart phone so I could check email while away from the office. Now I rarely don't have the phone in pocket, whether I am in the office or on the farm. Toddlers  get frustrated when the encounter TVs that don't respond to touch like IPADS. The world is changing. As I hear from time to time, "I saw on the internet that if it is on the internet it must be true."

Ag is no exception. Online and televised auctions for livestock are becoming all the rage. Unfortunately, just because it looks like an auction, doesn't always mean it is conducted like the auction at the sale barn. Basically, an auction is a series of offers (will you buy at this price) followed by a rejection (any other bidders) followed by a counter offer (okay your price is agreeable to me). Auctions are covered by federal regulation if they take a commission of the sale, those who are regulated can be found at  www.gipsa.usda.gov . Auctions that take a flat fee per animal may not be covered or regulated by the federal rules at all. Which makes it hard to deal with.  As always, it is good to do a little back ground work  and check the owners of the web site and auction company.

To report a problem you've encountered buying livestock, or to file a complaint, call 1-800-998-3447.

Wednesday, December 19, 2018
  • Patrick B. Dillon
  • Jill Dillon
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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.
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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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