265—44.2(16) Maximum allowable net worth.

1. 44.2(1)  Pursuant to Iowa Code section 16.58(9), the authority will establish the maximum allowable net worth for each calendar year. The maximum allowable net worth shall be increased or decreased from the previous year by an amount equal to the percentage increase or decrease (September to September) in the USDA “Index of Prices Paid for Commodities and Services, Interest, Taxes, and Farm Wage Rates” reported as of October 1 of the immediately preceding calendar year. The maximum allowable net worth will be rounded to the nearest thousand dollars.
2. 44.2(2)  A beginning farmer’s or BFTC beginning farmer’s net worth will be established by determining total assets minus total liabilities as determined in accordance with generally accepted accounting principles with appropriate exceptions and exemptions reasonably related to an equitable determination of the net worth of the individual, partnership, limited liability company or corporation. Assets shall be valued at fair market value.
3. 44.2(3)  For the purposes of this rule, “total liabilities” means all liabilities, including but not limited to accounts payable, notes or other indebtedness owed, taxes, rent, amount owed on any real estate contract or real estate mortgage, judgments, accrued interest payable, and any other liabilities. Liabilities shall be determined on the basis of generally accepted accounting principles.
4. 44.2(4)  In only those cases where a beginning farmer’s or BFTC beginning farmer’s liabilities include an amount for deferred tax liability that causes the applicant’s net worth to change from exceeding the maximum allowable net worth to an amount no greater than the maximum allowable net worth, the applicant is required to have a certified public accountant prepare the financial statement and provide supporting calculations and documentation acceptable to the IAD board.
5. 44.2(5)  For the purposes of this rule, “total assets” means all assets including but not limited to cash, crops or feed on hand, livestock held for sale, breeding stock, marketable bonds and securities, securities not readily marketable, accounts receivable, notes receivable, cash invested in growing crops, net cash value of life insurance, machinery, equipment, cars, trucks, farm and other real estate including life estates and personal residence, value of beneficial interest in a trust, government payments or grants, and any other assets. “Total assets” shall not include items used for personal, family or household purposes by the applicant; but in no event shall any property be excluded, to the extent a deduction for depreciation is allowable for federal income tax purposes. All assets shall be valued at fair market value by the lender. The value shall be what a willing buyer would pay a willing seller in the locality. A deduction of ten percent may be made from fair market value of farm and other real estate.
6. 44.2(6)  Notwithstanding the definition of “total assets” in subrule 44.2(5), the value of any retirement accounts will not be included as assets for the purposes of establishing a beginning farmer’s or BFTC beginning farmer’s net worth. For the purposes of this subrule, an account type identified in rule 701—302.47(422) will be considered a retirement account.

[ARC 0177D, IAB 4/1/26, effective 5/6/26]