Varley Law Office Celebrates 30 Years

 In 1992, Warren Varley opened a solo law practice in Stuart and has been providing legal services to the community ever since. His initial office was a room rented from Claudia Shepherd in what is now the LC Clinic building next to Lawbaugh Park. Claudia was more than a landlord and office-mate, she was a valuable mentor and friend. His first employee was Sheryl Christensen and they worked at an old oak double desk acquired from the Dallas County Courthouse. In 1996, Warren moved the law firm into a building across from the post office that he and his wife, Karen Varley, had purchased from Eugene Jirak. Also in 1996, Joyce (Mrs. Walt) Hick joined the firm as legal secretary, probate clerk, tax preparer, and office manager. Joyce had worked for the W. Dean Moore law office in Stuart since the early 1960's up until the sale of his practice in 1996. In addition, Joyce had obtained her real estate broker's license and managed a thriving real estate business known as Stuart Real Estate. Joyce's contribution to the success of Varley Law Office cannot be overstated! She was hard-working and dedicated to providing the best possible service to each client. Other valued employees of the firm, past and present, include Mary Skellenger Moffitt, Margaret Tiernan, Alberta Jirak, Carmen Hawley, Lesley Kerns-Wilson, Riley Schoen, Karli Rumley, Truman Wiles, Christine Baber, Jansen Van Daalwyk, Nicolas Aguero, Trevor Heimbaugh, Juanita Gilman, and Tyler McKibbin.

On Epiphany (Jan. 6) 2004, tragedy struck Varley Law Office when a fire destroyed the three adjoining buildings that included the firm. For a year and a half, the law office was located in the oldest downtown building at 100 NE Second ST, while the West Central Valley high school tech class built a new office at its present location, 201 NE Second Street.

In 2016, the firm expanded exponentially as Karen Varley joined the firm as a partner, and Varley Law Office PLC was organized. Karen had been in the legal profession for a considerable part of her life, starting as a legal secretary while in high school in Waukon, Iowa, and working for two years as a court reporter before obtaining degrees in agronomy and plant breeding from Iowa State and Cornell Universities. Eighteen years in the legal department at DuPont/Pioneer Hi-Bred International culminated in her getting a law degree from Drake University in May 2015.

Throughout its thirty years, Varley Law Office has provided a variety of legal services to the community, including business organization, estate planning, real estate transactions, tax planning and tax return preparation, and probate administration. Projects of particular note that the firm was involved in include the restoration of the Historic Saints Center and the Rock Island Railroad Depot; the organization and construction of 13 locally-owned and operated wind-energy turbines across Adair, Cass, and Taylor Counties; and a variety of development projects in conjunction with Stuart Enterprise for Economic Development, Inc.

Prior to opening his firm in Stuart, Warren worked at David L. Jungmann, PC, in Greenfield, IA, and Davis, Hockenberg, Wine, Brown, Koehn & Shors in Des Moines. In addition, he clerked for 7 rural district court judges in central Iowa for one year and for a New York appellate division justice in Cortland, New York for two years. Warren obtained his bachelors degree in agronomy from Iowa State University and his law degree from Cornell University in Ithaca, New York.

Karen and Warren Varley thank everyone who helped with or attended their open house November 10. At the celebration, Karen presented Warren with a plaque denoting that he attained "Very High" ratings in both legal ability and ethical standards from the Martindale-Hubbell® Law Directory. Martindale-Hubbell is a legal directory publisher founded in 1868 that rates attorneys based upon peer review. Warren's rating puts him in the top 10% of attorneys nationwide according to the American Registry.

Ag Lease Termination deadline Sept 1

 Now is the time dictated by Iowa law to begin negotiating crop land leases for 2023 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, 2023, 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, 2022. 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 CSR2¹ of the soil in question is the most accurate and fair way to arrive at a comparable rent.² 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% ROI. Farmland appraiser Jim Rothermich notes that farmland values have increased 35.3% over the past six months,3 while Extension economist Alejandro Plastina tells us cash rental rates rose at a comparatively modest rate of 10.3% over the last year (even so, the third increase in a row and largest since 2013).4 Both are being driven higher by food shortages and correspondingly high commodity prices, but rental rates are being tempered by equally high input prices. Nevertheless, an auction in Calhoun County in March pegged rent at a whopping $438.50/acre on a quarter section of 84.8 CSR2 land. Look for rising interest rates and a slowing economy to temper those increases.

Please contact our office if we can be of assistance. Good luck with your negotiations!

Sincerely,

VARLEY LAW OFFICE, PLC ©2022

1Updated “corn suitability rating” assessment You can calculate a CSR2 for your farm [http://websoilsurvey.nrcs.usda.gov/app/WebSoilSurvey.aspx]

or get it from your assessor information [http://www.iowaassessors.com/].

2 See Computing a Cropland Cash Rental Rate: https://www.extension.iastate.edu/agdm/wholefarm/pdf/c2-20.pdf

3  Jim Rothermich MAI ARA ALC theLandTalker@iowaappraisal.com   https://www.iowaappraisal.com/media/cms/May_2022_Iowa_Land_Auction_Results_D90F044F42244.pdf

4 Iowa State University Agricultural Economist Alejandro Plastina   https://www.extension.iastate.edu/agdm/articles/plastina/PlaMay22.html

2021 Income Tax Returns

Welcome to 2022! 2021 was an unusually prosperous year as the economy roared back in spite of the ongoing pandemic: stock prices & wages rose, farmers enjoyed high yields & commodity prices, and the American Rescue Plan pumped economic stimulus into the economy. With that in mind, there are many things to be aware of as you gather your year-end tax documents.

1. Married couples can deduct up to $600 in charitable contributions from your taxable income, even if you take the standard deduction (up from $300 per tax return last year). You still need a written receipt for any donation of $250 or more. Donations to charity from IRAs, donor-advised funds, and gifts of grain remain popular ways to get a charitable donation deduction.

2. If you received advanced Child Tax Credits (CTC), you will receive a letter Form 6419 showing the amount of advanced payments you received. Even though it looks like a letter, it is a form that your tax preparer will need along with your W-2s, 1099s, and other tax reporting documents. This is necessary because the $1,000 to $1,600 CTC per child phases out above $150,000 AGI for married filing joint and above $75,000 AGI for single taxpayers. The base $2,000 CTC per child still phases out above $400,000 AGI for married filing joint and above $200,000 AGI for single taxpayers.

3. We will also need to report the third ($1,400) Economic Impact Payments that you should have received under the CARES act. Like the CTC, these funds are not taxable, but there is a phaseout, so you will have to pay some or all of it back if your income is above your threshold. In addition, if you should have received it, but didn't, it is available as a refundable credit.

4. All taxpayers must answer the question about whether they did any virtual currency (BitCoin, Ethereum, etc.) transactions in 2021.

5. IRS is continuing to crack down on shareholders in S-corporations and partnerships who take distributions in excess of basis without reporting it as taxable income. There is a new Form 7203 for reporting shareholder basis.

Please continue to be alert to tax scams. Do not respond to any phone calls or e-mails purporting to be from the IRS, Social Security, or the Iowa Dept. of Revenue – those agencies will make initial contact by mail. You are welcome to bring any such letter to our office for verification. Never include social security or bank account numbers in an unencrypted e-mail or in a phone call you did not initiate.

If you choose to have our office prepare and file your federal and state tax returns, you will need to sign and return the engagement agreement on the reverse side of this letter. All professionally prepared tax returns must be filed electronically (“e-file”). If you want to file your own tax return for free, here is the  link: https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free

If you need worksheets or forms, please let us know. IRS requires mileage logs for vehicles with business use.  Here are the standard mileage rates for 2021:

You are required to send a Form 1099 to any individual, partnership or LLC that you paid $600.00 or more for services, rent or interest in the course of your trade or business. Payments to cooperatives, banks and other corporate entities are excluded. Wages in excess of $150 in any quarter require the filing of Forms W-2 and W-3. If you would like us to prepare these forms, you will need to provide us with the information before January 27, 2022.

If you have questions on any of the above or other tax matters feel free to call, e-mail, or stop in. When you have your records ready, you may let us know and we will set up an appointment that is convenient for you. Evening or Saturday appointments can be arranged. If you want to e-mail us information securely, send us an e-mail and we will open a Trustifi^® portal for encrypted transmissions.

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

Phone: (515) 523-2456 [FAX 866-297-7985] E-mail: varleylaw@iabar.org