Legal Education

Agricultural & Natural Resources Income Tax Issues Webinar
Barry Ward, Director, Income Tax Schools at The Ohio State University
Jeff Lewis, Income Tax Schools at The Ohio State University

Tax practitioners, farmers, and farmland owners are encouraged to connect to the Agricultural and Natural Resources Income Tax Issues Webinar (via Zoom) on December 13 from 8:45 a.m. to 3:20 p.m. The event is sponsored by Income Tax Schools at The Ohio State University.

The webinar focuses on issues specific to farm tax returns related to agriculture and natural resources and will highlight timely topics and new regulations.

The program is an intermediate-level course for tax preparers whose clients include farmers and rural landowners. Farmers who prepare and file their own taxes will also benefit from the webinar.

Tentative topics to be covered during the Ag Tax Issues webinar include:

• Timely Tax Issues Facing Agricultural Producers
  • Employee vs Independent Contractor
  • Cost-Sharing Exclusion
  • Farm Trade or Business
  • Farming S Corporations
  • Timber Taxation
• Legislative and Regulatory Update
• Form 1099s Requirements for Farmers and Ranchers
• Tax Schemes Targeting the Farm 
• Tax Issues Arriving at the Death of a Farmer
• Ohio Tax Update

Other chapters included in the workbook not included in the webinar includes: Material Participation Rules for Farmers, Ranchers and Landowners, Livestock Tax Issues, Depreciating and Expensing Farm Assets, Sale and Exchange of Farm Property, Sample Tax Return.

The cost for the one-day school is $180 if registered by November 29th. After November 29th, the registration increases to $230. Additionally, the course has been approved for the following continuing education credits:

•          Accountancy Board of Ohio, CPAs (6 hours)

•          Office of Professional Responsibility, IRS (6 hours)

•          Supreme Court of Ohio, Attorneys (5 hours)

Registration includes the Agricultural Tax Issues Workbook. Early registration (at least two weeks prior to the webinar) guarantees that you’ll receive a workbook prior to the webinar. 

The live webinar will also feature options for interaction and the ability to ask questions about the presented material.

More information on the workshop, including how to register, can be found at: https://farmoffice.osu.edu/tax/2023-ag-tax-issues-webinar

Contact Barry Ward at ward.8@osu.edu or Jeff Lewis at lewis.1459@osu.edu

Sixty-six undergraduate students just completed our Agribusiness Law class in the College of Food, Agricultural, and Environmental Sciences at OSU yesterday.  It’s always a challenge to teach students all I want them to know about agricultural law in the short time I have with them. And it always generates excitement and relief when I can see that they have learned.

In one assignment this semester, students had to consider the property laws we studied and devise three “real life” questions about the laws.  Next, they had to write the answers to the questions they drafted.  The legal accuracy of their answers is important, of course, and illustrates their comprehension of the laws we studied.  But selecting and writing the questions is equally important, as students must predict when and how the law would apply in a “real world” situation they might encounter.

Many of the student works showed that learning had certainly taken place this semester.  And some of their questions were so insightful and relevant that they should also be useful in the “real world.”  Below are excellent questions and answers from four students.  They illustrate what the students learned, but they will likely be helpful for our readers, too.  Take a look at what our students  are asking and answering about agricultural property laws!

Question 1 comes from Katie Anderholm, a senior from Medina, Ohio majoring in Agribusiness and Applied Economics.

Q:   Am I at risk to be sued from my new neighbors who keep complaining about my cows?
A:  A farmer is not as risk to be sued, or at least rightfully sued, by their new neighbors because of the Ohio Revised Code 929.04 and 3767.13. Both codes, the Right to Farm defense to civil action for nuisance and Ohio’s “Statutory Nuisance” Law, protect farmers and their operations from complaints regarding farming. The farmer’s neighbors who have been complaining about his cows do not have a strong argument for legal action because the agricultural activities were established before they moved adjacent to the farm. If the farmer is following proper animal care and manure handling and the neighbors moved after the farming began, then the neighbors will not have merit for a civil action. I would advise the farmer to have a conversation with the neighbors to ease tensions and explain that they knowingly moved next to a cattle operation and that there are certain things that come with that. I have learned that people who are not involved in agriculture in their everyday life to not understand the fundamentals, and sometimes education and consideration can go a long way.

Question 2 is from Cori Lee, a senior from Marysville, Ohio, graduating this May with a major in Sustainable Plant Systems Agronomy and a minor in Agribusiness.

Q:  Two siblings own ground that was passed on to them by their parents, where one farms, and the other one has no interest in farming. Can one sibling sell the land, even if the other one does not want to? What can be done to prevent losing the ground?
Yes, as co-owners, one sibling can sell their share of the land, even if the other sibling disagrees and is actively using the land for income and farming. This would force the other sibling to either also sell their share of the land or buy the other sibling out. This is explained in Section 5307.01 of the Ohio Revised Code, the partition law. Whether it is considered a “Tenancy in Common” or “Survivorship Tenancy”, they are both subject to partition. The partition process is also explained in Chapter 5307, and is often lengthy and can ultimately result in both owners being forced to sell the land. However, placing the land in an LLC can prevent this situation, as it would remove partition rights completely and the LLC would be treated as the sole owner of the land. This also provides other opportunities to have more control over how the land could be sold and allow terms to be set to buy out other LLC members. In order to avoid a scenario like this, landowners should carefully plan the transition of  their estate to avoid any costly mistakes for the next generation. 

Question 3 is by Kole Vollrath, a senior from South Charleston, Ohio majoring in Construction Systems Management.

Q:  I own a field and the state has contacted me seeking eminent domain for a roadway that they are planning to build cutting directly through my field. I am new to this sort of action and I am wondering what the proper actions will be in this case?
A:  Ohio Revised Code Chapter 163 is the eminent domain law that contains the four required procedures the taking entity (the state in this situation) must provide to the landowner. The first is the notice which you have already received, followed by a “just compensation” offer for the land in question, then appraisal of the property, and then finally a hearing in court to decide on or stop the taking if you don't agree to the offer. In the situation of a road as in this case, it is hard to stop the taking, so the fourth option will likely be more about getting fair money out of the deal rather than stopping construction completely. The reason that it will be hard to stop a road construction is because of Ohio Constitution Article 1 Section 19. This explains that eminent domain is allowed to happen when it is for a valid public use of the property, and since this is a road, it will be hard to argue that is not valid. However, it can still be beneficial to the landowner to hold strong in steps 2 and 3 and get an appraisal, then go to court and try to extract fair money for yourself out of the situation.

Question 4 is from Lyndie Williams, a senior from Bucyrus, Ohio majoring in Agribusiness and Applied Economics.

Q:  Can I be held accountable for damage to a neighbor’s property that they claim is due to water drainage from my property?
A:  In short, yes it is possible to be held accountable for damage to a neighbor’s property if it was caused by water drainage from your property, but not always. While every property owner has the right to reasonably use their land, including water flow and drainage, there can be consequences of this if harm is caused to others. First, determining what is “reasonable” for water drainage when evaluating harm to another is necessary. Courts will look at four factors when determining reasonable drainage: utility of the use, gravity of the harm, practicality of avoiding the harm, and justice. If your purpose for drainage is valid, the harm caused by drainage use is not overly detrimental to others, it is impractical to use an alternative form of drainage, and it is not unfair to require other landowners to bear losses caused by your drainage, then you would not likely be held accountable for damage to their property due to water drainage from your property. However, if some or all of these “reasonable”  requirements are not met, then you would need to look into drainage problem resolutions, as you could be accountable for their damages. Drainage problem resolutions include voluntary fix, drainage improvement projects, drainage easements, and litigation. For example, one drainage problem resolution is a drainage easement which is in writing, recorded, and involves an attorney. In a drainage easement you would pay the neighboring landowner for the right to drain your water onto their property for the damages they will incur as a result. Drainage easements are usually perpetual but can be termed and include access and maintenance rights and responsibilities for the easement holder.

Barry Ward & Julie Strawser, OSU Income Tax Schools

Dealing with the tax provisions of the COVID-related legislation for both individuals and businesses are among the topics to be discussed during the upcoming Tax School workshop series offered throughout Ohio in November and December.

The annual series is designed to help tax preparers learn about federal tax law changes and updates for this year as well as learn more about issues they may encounter when filing individual and small business 2021 tax returns.

OSU Income Tax Schools are intermediate-level courses that focus on interpreting tax regulations and changes in tax law to help tax preparers, accountants, financial planners and attorneys advise their clients. The schools offer continuing education credit for certified public accountants, enrolled agents, attorneys, annual filing season preparers and certified financial planners.

Attendees also receive a class workbook that alone is an extremely valuable reference as it offers over 600 pages of material including helpful tables and examples that will be valuable to practitioners. Summaries of the chapters in this year’s workbook can be viewed at this site:

https://farmoffice.osu.edu/tax/2021-tax-school-chapters

A sample chapter from a past workbook can be found at:

https://taxworkbook.com/about-the-tax-workbook/

This year, OSU Income Tax Schools will offer both in-person schools and an online virtual school presented over the course of four afternoons.

In-person schools:

November 1-2, Presidential Banquet Center, Kettering/Dayton

November 3-4, Ole Zim’s Wagon Shed, Gibsonburg/Fremont

November 17-18, Ashland University John C. Meyer Convocation Center, Ashland

November 22-23, Christopher Conference Center, Chillicothe

November 29-30, Zane State/Ohio University Zanesville Campus, Zanesville

December 2-3, Nationwide & Ohio Farm Bureau 4-H Center, OSU Campus, Columbus

December 6-7, Hartville Kitchen, Hartville

Virtual On-Line School presented via Zoom:

November 8, 12, 15 & 19, 12:30 – 4:45 p.m.

Register two weeks prior to the school date and receive the two-day tax school early-bird registration fee of $400.  This includes all materials, lunches and refreshments. The deadline to enroll is 10 business days prior to the date of each school. After the school deadline, the fee increases to $450.

Additionally, the 2022 RIA Federal Tax Handbook is available to purchase by participants for a discounted fee of $50 each. Registration information and the online registration portal can be found online at:

http://go.osu.edu/2021tax

In addition to the tax schools, the program offers a separate, two-hour ethics webinar that will broadcast Wednesday, Dec. 15 at 1 p.m. The webinar is $25 for school attendees and $50 for non-attendees and is approved by the IRS and the Ohio Accountancy Board for continuing education credit.

A webinar on Ag Tax Issues will be held Monday, Dec. 13 from 8:45 a.m. to 3:20 p.m.

If you are a tax practitioner that represents farmers or rural landowners or are a farmer or farmland owner that prepares your own taxes, this five-hour webinar is for you. It will focus on key topics and new legislation related specifically to those income tax returns.

Registration, which includes the Ag Tax Issues workbook, is $150 if registered at least two weeks prior to the webinar. After November 29, registration is $200. Register by mail or on-line at https://go.osu.edu/agissues2021.

Participants may contact Ward at 614-688-3959, ward.8@osu.edu or Julie Strawser 614-292-2433, strawser.35@osu.edu for more information.

There’s an old saying that legislation either lives or dies in committee.  Committees and their chairpersons play a critical role in determining whether an idea makes it through the legislative process and becomes a law.   So let’s take a look at the new members and chairs of our agriculture committees, recently appointed for the new two-year session of the 134^th Ohio General Assembly.

After announcing a change in the committee’s name from “Agriculture and Rural Development” to “Agriculture and Conservation Committee,” House Speaker Bob Cupp (R-Lima) finalized his committee appointments.  The new committee will include:

• Rep. Kyle Koehler (R-Springfield) will return as Committee Chair.  Now in his fourth term in the Ohio House, Rep. Koehler has a background as a software engineer and working for his family’s tool company but has raised livestock and refers to himself as a hobby farmer.  Rep. Koehler recently received the “Friend of Agriculture” endorsement from Ohio Farm Bureau.
• Rep. Rodney Creech (R-West Alexandria) will serve as the new Committee Vice Chair during his first term in the House. Rep. Creech farms in Preble County, owns a lawn care business, and has served as a township trustee and county commissioner.
• Rep. Juanita Brent (D-Cleveland) will also return to the committee as its Ranking Member.  Rep. Brent is in her second term in the House, with a background in non-profit and community engagement work.
• Rep. Brian Baldridge (R-Winchester)
• Rep. Adam C. Bird (R-New Richmond)
• Rep. Sarah Fowler Arthur (R-Geneva-on-the-Lake)
• Rep. Paula Hicks-Hudson (D-Toledo)
• Rep. Don Jones (R-Freeport)
• Rep. Darrell Kick (R-Loudonville)
• Rep. Joseph A. Miller (D-Amherst)
• Rep. Michael J. O’Brien (D-Warren)
• Rep. Jena Powell (R-Arcanum)
• Rep. Michael Sheehy (D-Oregon)

On the Senate side, Senate President Matt Huffman (R-Lima) announced the members of the Agriculture and Natural Resources Committee, which will include:

• Sen. Tim Schaffer (R-Lancaster) as the new Committee Chair.   Sen. Shaffer is in his third term in the Senate and was also elected to the Ohio House for four terms.  He is also an association executive in the private sector, and has earned the “Friend of Agriculture” award from Ohio Farm Bureau along with over a dozen other awards for his legislative service. 
• Sen. Stephen A. Huffman (R-Tipp City) will serve as the Committee Vice Chair. Following two terms in the House, Sen. Huffman is in his first term as a Senator.  Sen. Huffman is a practicing physician and will also chair the Senate’s Health Committee.
• Sen. Teresa Fedor  (D-Toledo) is the committee’s Ranking Minority Member.  A two-term Senator also elected to three terms in the House, Sen. Fedor is a veteran of the U.S. Air Force and Ohio Air National Guard and a retired teacher for Toledo Public Schools.
• Sen. Bob Hackett (R-London)
• Sen. Tina Maharath (D-Columbus)
• Sen. Sandra O’Brien (R-Ashtabula)
• Sen. Bob Peterson (R-Washington Court House)

The House Agriculture and Conservation Committee holds its first meeting next Tuesday, February 16.  Follow the committee through its website, which includes meeting agendas and minutes, bills under consideration, and video of committee meetings.

The Senate Agriculture and Natural Resources Committee began its work last week with consideration of a bill authorizing the use of owls in the sport of falconry.  Meeting agendas and bills under consideration are available on the committee’s website

Stay tuned to the Ohio Ag Law Blog for updateson legislative proposals and what bills live or die in our agriculture committees.