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We are here from the government to help you, and arbitrarily penalize your ability to take part in government programs….

Starting crop year 2014 , producers whose average adjusted gross income is over $900,000  over the preceding three years are not eligible to receive payments or benefits from most   FSA/NRCS programs. Unfortunately, depending on how you hold your assets will determine how much of the income is counted.  

For a C corporation, the limit is calculated by taking taxable income plus charitable contributions.  However, for S corporations only ordinary income is reviewed.  For estates or trusts, FSA looks at taxable income plus charitable deductions.  For limited liability companies, limited liability partnerships ,limited partnerships, or similar entities, FSA uses total income from trade or business plus guaranteed payments to partners.  For individuals, adjusted gross income is used. The problem is what line they look on to get this taxable income.

S corporations  or partnership do not get the advantage of 179 (accelerated depreciation)  as rules require it to be reported on the tax return under a separate line and the FSA guidance doesn't account for the  separate reporting. A C- Corporation  or self employed tax forms folds Section 179 expenses right into the income determination line. In practice this produces a lower income level for FSA/NRCS purposes even though for tax purposes they have the same net result.

Many folks use S corps for farming operations as C Corps have a double taxation issue that many like to avoid. While it would be a simple fix to tell the USDA/NRCS to fold back in Sec. 179 it is never that easy getting two divisions of the administrative branch of government to figure things out. I bet either the courts or the legislature will have to provide the fix, which could take months or years to happen.

Sometimes, the greater good trumps individual's rights.  Case in point, when in my house, two kids want to see the movie downtown and one doesn't, the protesting party is drug along to the theater with promises of popcorn to smooth over hard feelings for having to participate in an activity they don't want to, because the rest of the clan does in fact want to see whatever is on the big screen. Eminent domain is kind of the same thing, if the government wants to use your land for the public good (i.e go to the movies) and you can't agree to let them take it or agree on how much the land is worth (i.e not go to the movies), then a compensation system in set up to determine what size of popcorn you get.. er I mean...how much money you will receive for your property.
First, if you voluntary agree to let some government authority take control of your property or some private person do the same, you are avoiding eminent domain, not participating in it.  In this piece, read government to include whatever private company (like a utility) is trying to use the eminent domain power.

Interestingly enough, if you voluntarily give up the easement, you should ensure that in the event of non use or abandonment, you get the property back. That is the way it works if the government takes it from you, but if you voluntarily give it up, you may not have this protection unless you work it into your agreement. If the agency is offering you 130% of whatever value is derived from the appraisal they order in addition to paying a portion of your fees, it is doing so to meet a "good faith" requirement that is required to be met before it can forcibly take your land.

Iowa Code Chapter 478 outlines how we play and share well with society in eminent domain situations.  First, you need to remember that private property can be taken for the public use if it has a demonstrated public purpose and you are paid "just compensation".

Every year, in the spring, another farm publication runs a story about how to take land from your neighbor via adverse possession based on the idea that a fence moved a while back. It always generates interest and discussion, but when the facts and the law are pealed back far enough, rarely does the back 40 become the back 42. So, let us peal back Iowa Adverse Possession cases and take a look.

Iowa Adverse Possession

In Iowa, adverse possession determines acquisition of title (not use) to property by possession. The doctrine of adverse possession is based on the 10-year statute of limitations for recovery of real property in Iowa Code § 614.1(5).   A party claiming title by adverse possession must establish hostile, actual, open, exclusive, and continuous possession, under claim of right or color of title for at least ten years.   Proof of these elements must be "clear and positive." Because the law presumes possession is under regular title, the doctrine of adverse possession is strictly construed. That means it is not going to be something the court wants to find.

Planning aging while you are competent and able to find suitable help is paramount to your success in later years.
 
An Iowa criminal case that finished up its appeals process recently, shows us how elderly individuals can be easily abused, both physically and financially. In this case, Mr. Bean, an non relative care giver was convicted of   involuntary manslaughter, two counts of second-degree theft, neglect of a dependent person, and two counts of dependent adult abuse.
 
Here are the facts: Bean rented farm property from a brother and sister without close family. He got himself appointed as power of attorney holder and named beneficiary under their wills and became a contract purchaser of the pair's property at below market value. When Bean did get a bank loan to pay off the contract purchase, he used his power of attorney to give the sale proceeds right back to him and his wife. Bean paid his personal bills with the pairs funds.  After the brother's death,   Bean relocated the sister to a remote farm house and lived with her. The sister, from the time of the move until her death received no medical attention, even though she had been previously prescribed medication for a variety of issues. In the year she lived with her power of attorney holder before her death, her weight went from 134 pounds to 74 and her right arm had been broken, but had never been set. She had   broken ribs and bruising.   
 
How can this happen in Iowa? Easy, when a person executes certain duties under a financial power of attorney for another individual, the courts have a very limited ability to review those actions.  Bean isolated this couple and took advantage of them with no checks on balances on his authority and power. We as a society have no positive duty to act without a relationship to another person. That means that it is not crime to watch someone get wounded or worse if you don't owe that person a duty (like a power of attorney, guardian, care giver, etc, etc). We in Iowa have a mind your own business attitude. Coupled with the privacy laws and policies, often times people can see a piece but not enough to see the trend.

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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