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... →On June 12, 2020, the Iowa Supreme Court issued a ruling in the case of In The Matter of the Estate of Sandra R. Franken, John E. Rottinghaus and Dessie Rottinghaus vs. Lincoln Savings Bank, Fiduciary of the Estate of Sandra R. Franken. Said Ruling was amended on August 17, 2020. In 1973 the Rottinghauses sold real property of Dessie to Sandra and James Kipp, as joint tenants with full rights of survivorship. The deed granted the Rottinghauses a first right of refusal which stated as follows: Grantees hereby agree that they will not sell or otherwise convey the premises
More Legal News & Information... →On April 5, 2019, the Iowa Supreme Court issued an opinion in the case of Serena Konrardy and Carrie Rigdon n/k/a Carrie Burmeister vs. Vincent Angerer Trust and DeWitt Bank & Trust Company, as Trustee of said Trust. The Trust provided that on the death of the Trustor, equal shares would be established for each of the Trustor’s five siblings. Each share was to be placed in individual trusts for the sibling and the spouse of a deceased sibling. If both a sibling and the sibling’s spouse had died, the Trust directed the trustee to distribute the Trust share to
More Legal News & Information... →Last month the IRS issued the final regulations regarding Section 199A. The IRS also issued IRS Notice 2019-07 which set forth a safe harbor under which a rental real estate enterprise would be treated as a trade or business under Section 199A. The purpose of the Notice is to give taxpayers guidelines as to the application of the 199A deduction for rental real estate properties. To qualify for the safe harbor requirements, the taxpayer must meet the following requirements: Keep separate books and records setting out the income and expenses for the rental real estate enterprise; For tax years beginning
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 Governor recently signed SF 2175 into law which replaces Iowa Code Chapter 651 which deals with Partition of Real Estate. The biggest change in the new law is the establishment of a partition procedure for “heirs property”. For the first time a new law allows the equitable remedy of “owelty” which provides for a payment of money to equalize the value of property received in a partition in kind action. Under the new Chapter, an individual who inherits property as a tenant in common with other relatives and who does not want to sell the property, in all likelihood
More Legal News & Information... →I frequently see clients come into my office who have met with their banker and set up joint tenancy with rights of survivorship bank accounts naming another person who is not their spouse as the joint tenant on the account. Often times a client simply wants to name another person to write checks on the account. Note that there is a difference between adding another person with signature authority versus adding another person as a joint tenant. A person with only signature authority does not have ownership of the account and only has the power to write checks on the
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... →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
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