Varley Law Office PLC

Varley Law Office PLC
201 NE 2nd ST, Stuart, Iowa 50250; (515) 523-2456

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Friday, August 14, 2020

2021 Iowa Farm Leases

Varley Law Office, PLC

Now is the time dictated by Iowa law to begin negotiating crop land leases for 2020 or at least notify your tenant/landlord, as the case may be, if you wish to change any of the terms in your current lease. (Remember that mutual consent is required if you want to make changes in the middle of a multi-year lease.)

If you wish to terminate a cropland or pasture lease ending March 1, 2020, and have not already done so, you must serve notice in the manner set out in Iowa Code §562.7 on or before September 1, 2020. This statute does not apply to custom farming arrangements, but by tradition, many farm operators have come to expect notice by September 1.

Basing cropland rent on the current CSR2 (updated “corn suitability rating” assessment) of the soil in question is the most accurate and fair way to arrive at a comparable rent [See Computing a Cropland Cash Rental Rate]. In addition, you can calculate a CSR2 for your farm. Below is a table of farmland values and cash rents in counties for which we prepare farmland leases:



The table above is based upon averages from sometimes limited survey results, but it does give a general idea of what the market for Iowa farmland looks like. The predicted annual rental is based on a 3.25% ROI.  Land prices have risen this year, driven by low interest rates and favorable commodity programs. To a lesser extent, rental rates followed land prices as they rose. Currently, there is a strong demand for land, but a limited supply. In addition, there has been an increase in the number of landowners engaging in custom farming. Ag commodity programs such as subsidized crop insurance and the market facilitation program have reduced risk, encouraging land owners to engage farm management companies such as Hertz Farm Management and Peoples Company, rather than opt for cash rentals, so they can take advantage of tax incentives available to operators. Things to keep an eye on include whether interest rates will remain low, the global response to the pandemic, and our trade policy with China.

Finally, with its growing popularity, it is important to know a little information regarding Hemp production in the State of Iowa. In May 2019, the Iowa Hemp Act was signed and this year the Iowa Department of Agriculture & Land Stewardship began issuing licenses to grow hemp. However, it is important that landowners know who they are leasing their land to if they plan on growing hemp on their land. If the hemp licensee grows hemp that fails the THC test, the entire crop will have to be destroyed. If the licensee fails to destroy the crop, the State of Iowa will come onto the land to do it. Moreover, if the operator cannot be found, the landowner will be assessed the costs of destroying the crop grown on their land.

Please contact our office if you have questions. Good luck with your negotiations!

Sincerely,                                  

VARLEY LAW OFFICE, PLC     

Warren A. Varley • Attorneys-at-Law • Karen K. Varley

201 NE Second Street

P. O. Box 235 

Stuart, Iowa 50250-0235

(515) 523-2456

FAX 866-297-7985

varleylaw@iabar.org

©2020

Monday, March 30, 2020

Effective March 30, 2020,
the lobby at Varley Law Office, PLC, will be closed
to help reduce the spread of the coronavirus Covid-19.
If you require legal services, please contact us
by phone at 515-523-2456
or by e-mail at varleylaw@iabar.org
We apologize for any inconvenience, but believe this is a necessary step to protect public health.

Monday, July 01, 2019

Adapted from IRS Tax Tip 2019-79:

Members of the armed forces are entitled to certain tax benefits


Members of the military and their families often qualify for special tax benefits. Here are some examples:
  • Combat pay exclusion. If someone serves in a combat zone, part or all of their combat pay is tax-free. 
  • Deadline extensions. Some members of the military – such as those who serve overseas – can postpone most tax deadlines. 
  • Joint return signatures. Both spouses must normally sign a joint income tax return. However, if military service prevents that from happening, one spouse may be able to sign for the other or get a power of attorney.
  • Reserve and National Guard travel. Members of a reserve component of the Armed Forces may be able to deduct their unreimbursed travel expenses on their return. In order to do so, they must travel more than 100 miles away from home in connection with their reserve duty.
  • ROTC allowances. Some amounts paid to ROTC students in advanced training are not taxable. This includes things like allowances for education and subsistence. On the other hand, active duty ROTC pay is taxable. This includes things like pay for summer advanced camp.
For more information, see Publication 3, Armed Forces’ Tax Guide.


Wednesday, March 27, 2019

People's Law School Event - FREE!

The Iowa State Bar Association is hosting a free public information session focused on older Iowan issues, including:
  • power of attorney and living wills
  • healthcare directives
  • disposition of remains
The meeting is open to the public and will be held at the Iowa Bar Association headquarters at 625 E. Court in Des Moines on Thursday, April 18, from 5:30 to 7:00 p.m. Free parking is available on site.

The speakers are Greg Kenyon, elder law attorney with the Bradshaw Law Firm, and Deanna Clingan-Fischer, Ombuds Officer at Iowa State University.
This seminar is part of the Iowa State Bar Association’s ongoing effort to help Iowans navigate life’s legal questions through its “People’s Law School” series.

Register for the event here  or call 515-243-3179 
or email peopleslawschool@iowabar.org 


Thursday, February 28, 2019

IRS extends farmers' deadline for 2018 estimated tax payment


Source:  IRS QuickAlerts February 28, 2019

The IRS is granting an extension of the March 1st deadline for farmers and fishermen to make their estimated tax payment before being subject to estimated tax penalties – as long as they file and pay the full amount of tax reported on their 2018 return by April 15, 2019.

• To claim the waiver of the estimated tax penalty, farmers and fishermen must attach Form 2210-F, Underpayment of Estimated Tax by Farmers and Fishermen, to their 2018 tax return. The taxpayer’s name and identifying number should be entered at the top of the form, and the waiver box (Part I, Box A) should be checked.  The rest of the form should be left blank.

• This relief will expand the number of taxpayers eligible for filing the Form 2210-F using checkbox A and will not require calculations or an attachment.

• Farmers or fishermen who qualify for the relief include: Those who did not make the required estimated tax installment payment by January 15, 2019 AND who file and pay the full amount of tax reported on their 2018 return by April 15, 2019.

Friday, January 18, 2019

File Your Federal Tax Return for FREE !!!

The Internal Revenue Service (IRS), in conjunction with tax return preparation software companies, makes filing your own federal tax return online free.  Simply gather your 2018 tax information and a copy of your 2017 tax return (if you were required to file) and go to:
   https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free
In addition, if your income in 2018 was less than $66,000 you can also file your state income tax return for free.
     IRS will begin processing 2018 federal tax returns on January 28, 2019.  While the partial federal government shutdown is in effect, IRS will not process any returns for tax years beginning prior to January 1, 2018.

There is a great deal of uncertainty regarding this year's tax return process due to (1) the failure of the Treasury Department to issue regulations regarding many of the changes included in the Tax Cuts & Jobs Act, (2) the redesign of Form 1040 from 2 letter-sized pages into 6 half-page-sized pages [arguably, but not in reality, postcard-sized], and (3) the ongoing federal government shutdown which has furloughed 90% of IRS employees and required the remaining 10% to work without pay. Nevertheless, the President has promised that tax refunds will be sent out promptly. Experts predict this will result in rampant tax refund fraud attempts. The best protection you have against someone filing a tax return with your personal information is to file your return as early as possible. IRS will begin processing 2018 tax returns on January 28, 2019. Do not respond to any phone calls or e-mails purporting to be from the IRS or the Iowa Dept. of Revenue – those agencies do not contact taxpayers that way. Never include social security or bank account numbers in an unencrypted e-mail or in a phone call you did not initiate.

Sunday, January 13, 2019

IRS will begin processing 2018 tax returns Jan 28

Despite the ongoing federal government shutdown, which includes the U. S. Treasury Department, IRS announced that it will begin processing income tax returns for calendar year 2018 on Monday, January 28, 2019.  Individual income tax returns are due on April 15, 2019.  IRS announcement

Fiscal year tax returns due in November or December 2018, or January 2019, have been extended to February 15, 2019.