In an opinion issued October 10, 2014, the 8th Circuit Court of Appeals in the case of Morehouse v. Comr. overturned the decision of the U.S. Tax Court on the issue of whether Conservation Reserve Program (CRP) payments to non-farmers are subject to self-employment tax. The Tax Court had determined that Mr. Morehouse was “‘engaged in the business of participating in the CRP․ with the primary intent of making a profit’ and that there was a sufficient nexus between this business and the CRP payments, thus categorizing the payments as net earnings from self-employment.” The Tax Court rejected the argument that were rentals from real estate and therefore not included in net earnings from self-employment.

I spent much of last week at the LDS Philanthropies National Planned Giving Council’s Annual Seminar. It is a great conference where Attorneys, Accountants, Wealth Advisors, and Trust Officers from around the country gather to discuss planned giving and the best practices when advising families in regards to wealth transfer.

I am working on putting the finishing touches on materials for a conference I am speaking at in December. Among the topics I will be speaking on is choosing the right entity for your farm or ranch business. There are many considerations in making this choice and often the business objectives can be at odds with the estate planning objectives. It is important to consider and weigh both when making these decisions.

Here in Cache County, Utah, school is officially back in session. Around the country many have already started or will be starting back shortly. I recently read an article in Forbes Magazine entitled “Two Document Every 18 Year Old Should Sign.” The article is a great reminder that if you have a child who has now turned 18 there are a couple of additional items you should add to your back to school checklist.

One of our cars was running a little rough so I took it into our local mechanic last week for a tune-up. Turns out in addition to the tune-up I was a little behind on some of the maintenance. A new water pump and timing belt later and the car is ready to run. I could have postponed the work, but eventually it had to be done and if I had not taken care of it quick enough, there may have been some real damage to the car.

If you follow this Blog, you know I am a big golf fan. This weekend, the Open Championship, one of golf’s four “major” championships is being played at England’s Royal Liverpool. As I have watched some of the world’s great golfers stepping up to the tee, it is clear they each have a routine, a process or checklist they follow on each swing and throughout the tournament. As they review mentally the steps for success, they are more likely to be successful in their pursuits. The same can be said of succession planning. There will be hazards and bunkers. There will be errant shots and injuries. You may even go out of bounds and have to take a penalty stroke. But if you can keep coming back to your process you will ultimately find your way to success.

While there may be many reasons for forming a business entity of one type or another, one of the most important reasons is the limited liability of individual owners for the debts and obligations of the company. Unlimited personal liability for the debts and obligations of the business exist for general partners in a partnership and sole proprietors. Owners of limited liability entities, such as corporations or limited liability companies, on the other hand, have personal liability for the debts and obligations of the business only to the extent of their invested capital and to the extent that they may have assumed personal responsibility for the same.

Next week in Los Angeles County Probate Court, a trial will occur to determine if Donald Sterling, the now infamous owner of the Los Angeles Clippers, was properly removed as a trustee of the Sterling Family Trust. Sterling’s removal paved the way for the Clippers to be sold to former Microsoft CEO Steve Balmer for $2 billion. Sterling was removed after two doctors determined that he was mentally incapacitated and, as a result, no longer able to manage his own legal and business affairs, nor that of the Trust. The Trust provided for a removal in such instances. Sterling has now sued to be re-instated as the Trustee.