On May 21, 2021, the Iowa Supreme Court issued an opinion In The Matter and Conservatorship of Marvin M. Jorgensen, No. 18-1235 (Iowa Sup. Ct. May 21, 2021). Marvin Jorgensen suffered a stroke in 2016 that left him unable to manage his nearly 18,000 acres of Iowa farmland. Prior to the stroke, Marvin leased approximately half of his farmland to his children and to several grandchildren in “handshake” agreements that were never put in writing. After the stroke, a Conservatorship was opened for Marvin and the Conservator entered into new written leases with family members which continued with Marvin’s practice
More Legal News & Information... →Section 1031 of the Internal Revenue Service Code allows a taxpayer to defer recognition of capital gains and related federal income tax liability on the exchange of investment real estate. The capital gains and related federal income tax liability are deferred to the time that the replacement real estate is sold. In order to meet the IRS requirements, the seller must use a qualified intermediary to handle the sale of the property and the purchase of the replacement property. A taxpayer has 45 days from the date of sale to identify the replacement property and 180 days from the date
More Legal News & Information... →The Tax Cuts and Jobs Act has added a number of complex issues to the tax preparation for businesses. Taxpayers who previously prepared their own tax returns with Schedule C’s or Schedule F’s will face many complex issues under the new tax act. One issue is the new 20 percent pass–through deduction for non-C corporation businesses. The Act also has significant changes regarding depreciation and the deduction of expenses. Another item that adds complexity to tax preparation for 2018 is that the State of Iowa has not adopted the changes in federal tax law for the year 2018. I highly
More Legal News & Information... →Last month the Internal Revenue Service issued a proposed regulation addressing large gifts made prior to 2026. The basic exclusion amount for estate or gift tax for the year 2017 was $5,490,000.00. The 2017 Tax Cuts and Jobs Act increased the basic exclusion amount from 5 million to 10 million for tax years 2018 through 2025 with both dollar amounts adjusted for inflation. For the year 2018 the basic exclusion amount adjusted for inflation is $11,180,000.00 million. For 2019 the basic exclusion amount adjusted for inflation is $11,400,000.00. Under the 2017 Tax Cuts and Jobs Act in the year 2026,
More Legal News & Information... →The Internal Revenue Service recently issued a Notice (Notice 2018-76) regarding the deductibility of business meal expenses under the new Tax Act. The Notice may be relied on until proposed regulations are published. The Notice provides that most business meal expenses will be 50 percent deductible as long as a separate invoice is provided for the food. The new Tax Act prohibits the deduction of entertainment expenses. It has been unclear until this Notice whether business meals involving a client or a potential client would fall into the entertainment expense category. As such, until the proposed regulations are published, a
More Legal News & Information... →A new law was recently signed by the Governor which authorizes tax-preferred First-Time Homebuyer Savings Accounts beginning in the year 2018. Under the law, when an individual sets up a FTHSA account, he or she may exclude from their Iowa adjusted gross income yearly deposits of $2,000. Married taxpayers who file a joint return may exclude up to $4,000.00 a year if the money is deposited into a joint FTHSA. Any interest earned on a FTHSA account, will not be included in a taxpayer’s income. At the time that the FTHSA is opened, an individual can designate a sole beneficiary.
More Legal News & Information... →On April 20, 2017, Governor Branstad signed the Iowa Uniform Fiduciary Access to Digital Assets Act which is codified in Chapter 638 of the Iowa Code. The Act broadly defines “digital asset” to mean any electronic record in which an individual has a right or interest. However, the term “digital asset” does not include an underlying asset or liability unless the asset or liability is itself an electronic record and the term “digital asset” does not include health information or individually identifiable health information as those terms are defined in the Federal Health Insurance Portability and Accountability Act of 1996.
More Legal News & Information... →The lawsuit filed by the Des Moines Waterworks against the drainage districts in three Northwest Iowa Counties has been followed extensively in the press. The case which deals with the issue of how to deal with the levels of nitrates in the State’s drinking water was filed in the United States District Court for the Northern District of Iowa. The Federal District Court Judge certified four questions to the Iowa Supreme Court in order to clarify issues of Iowa law raised in the lawsuit. The Iowa Supreme Court issued a ruling finding that Iowa law has immunized drainage districts from
More Legal News & Information... →Many residential developments (homes, condos and townhomes) have restrictive covenants which set out restrictions regarding the use of properties located in the development. Most restrictive covenants set forth the term of years that the restrictive covenants will be in effect. As set out below, such terms do not always apply to restrictive covenants that are also “use restrictions”. Chapter 614.24 of the Iowa Code was initially adopted in 1965 and provides for the termination of all “use restrictions” on a property after a period of 21 years. The term “use restrictions” has never been defined in the Code until the
More Legal News & Information... →I am not suggesting that one must be a skeptic but rather that constructive doubt is useful in my profession. I need to have an understanding of the differences among (1) what I think, (2) what I believe, and (3) what I know. With regard to thinking, it involves the development of a process by which I gather information. It is being open-minded, being non-judgmental and does not evaluate the information or documentation assembled. With regard to what I believe, it involves looking at the information and the documentation assembled and sorting through the information and documentation to analyze which
More Legal News & Information... →