Frequently Asked Questions

The excess fertility deduction allows landowners to recover the portion of their land purchase price attributable to elevated levels of soil fertility — typically phosphorus, potassium, and other plant-available elements — that existed at the time of acquisition. These fertility reserves are treated as part of the cost basis of the property and may be depreciated over time under the Internal Revenue Code.

The deduction is grounded in long-standing IRS principles, including §167 (for depreciable assets) and §180 (for current-year fertilizer application by farmers). The core idea: if fertility contributed measurable value to the property, and if that fertility depletes through agricultural use, it qualifies as a depreciable component — much like fencing, drainage, or irrigation.

If the soil contained high levels of plant-available nutrients (relative to agronomic norms) at the time of purchase or inheritance, there may be a measurable excess. We determine this by analyzing soil tests, crop history, and regional benchmarks — even if you didn’t sample the soil back when you first acquired or inherited the land.

The IRS permits deductions for components of farmland that are capital assets and subject to exhaustion or depletion — and that includes long-lived soil fertility. Under IRC §167, depreciable property includes physical assets that wear out or get used up through business activity. If fertility was present in the soil at the time of purchase or inheritance and gradually declines through crop production, it fits squarely within that definition.

Although the IRS doesn’t single out “excess fertility” by name in the code, their own guidance has acknowledged this concept in multiple contexts, including Technical Advice Memorandum 9211007. The key is having a defensible scientific valuation to support it — which is where Farm Advisors comes in.

This deduction is based on what was already in the ground when the land changed hands — not what you applied afterward. Our analysis focuses on the residual fertility that existed at the time of acquisition and would have factored into the land’s market value.

To qualify for this deduction, the valuation must follow a rigorous, well-documented methodology that can stand up to IRS scrutiny. This isn’t just a matter of running soil numbers — it requires careful modeling, credible benchmarks, and a clear link between scientific findings and tax treatment.

At Farm Advisors, we apply research from leading agronomic institutions, historical fertilizer pricing, and region-specific thresholds to calculate the maximum defensible value. Our work requires a deep understanding of both soil science and the tax code — a combination that goes beyond traditional agronomic services. While many agronomists are highly skilled in production-focused recommendations, this type of valuation demands a different lens: one focused on the IRS standards for capital asset treatment. The result is a report grounded in science, aligned with tax requirements, and built to support your advisor’s work with confidence.

Equally important, we serve as a neutral third party. The IRS gives greater weight to independent valuations than to internal or self-prepared estimates. Our role is to deliver an objective, credible report that helps your advisor apply the deduction confidently and correctly.

Our approach combines soil chemistry, agronomic benchmarks, and historical pricing to arrive at a defensible, science-based valuation.

We begin by analyzing lab-tested soil data to determine the concentration of key fertility components. We then compare those levels to regionally appropriate baseline thresholds based on land-grant university research and publications. The difference between the actual levels and those benchmarks represents the "excess."

We convert that excess into equivalent pounds of commercial fertilizer (e.g., P₂O₅ and K₂O), then apply historical market pricing from the time of acquisition to determine the dollar value. The final valuation reflects both the scientific evidence and the economic value of the fertility at that point in time.

If the deduction is being taken over time, we also model how that fertility would be depleted through normal crop production based on yield expectations and nutrient removal rates. This creates a field-specific, data-driven foundation that supports the deduction under IRS guidelines.

Most landowners and even many tax professionals simply aren’t aware that soil fertility can be treated as a depreciable asset. The tax code doesn’t call it out by name, and until recently, there wasn’t a reliable method for measuring and documenting it. Farm Advisors brings the scientific rigor and valuation expertise needed to support this deduction — in a way tax advisors can confidently use.

Row crops, hayfields, orchards, vineyards, and livestock grazing land are all potentially eligible. What matters is the land’s use history, the presence of fertility at the time of acquisition, and how the deduction is taken. We’ll work with you and your tax advisor to evaluate the best approach.

The key point is that the land must be used for agricultural purposes — either currently or in the past — and must have had measurable fertility at the time you acquired it.

Yes — the land must either be actively farmed now or have been farmed in the past. This deduction is based on the presence of excess fertility that is depleted through agricultural production, so there must be a connection to farming use.

If you're claiming the deduction under IRC §180, the land must be actively farmed, and the taxpayer must be in the trade or business of farming during the year it was acquired. That allows for the fertility to be expensed in full that same year.

If you're not actively farming, or if you're taking the deduction in a later year, §167 depreciation may still apply — but only if the land was previously used in farming.

We’ll help determine which treatment is appropriate based on your land’s use history and tax position.

Yes — Farm Advisors works with landowners, operators, and tax professionals nationwide. Our methodology is designed to apply across all U.S. farming regions, and we adjust our benchmarks to reflect local agronomic conditions and fertilizer pricing. Whether your land is in California, Georgia, Nebraska, or anywhere in between, we can evaluate its eligibility and provide a defensible, IRS-aligned valuation.

No — a deduction may still be available even if the land was acquired years ago. While the potential value tends to diminish for acquisitions more than 15 years old, it’s often still possible to document and recover the fertility present at the time of purchase. Using soil tests conducted today — along with historical fertilization and yield records — we can model what the fertility levels were at the time of acquisition.

Depending on your situation, the deduction can be claimed through a “catch-up” adjustment using IRS Form 3115, or in some cases, by amending a prior return. The appropriate path depends on timing, use, and whether the fertility has already been accounted for elsewhere. We’ll coordinate with your tax advisor to determine what’s feasible.

Yes. Inherited land often qualifies, as long as a step-up in basis occurred. We can assess fertility levels as of the date of inheritance and determine whether there’s a supportable value that can be recovered. This may be particularly useful for estates that received highly productive farmland.

Yes. Many of our clients hold farmland through partnerships, LLCs, S corporations, or trusts. The deduction can typically still be applied, as long as the entity is eligible to take depreciation (or §180, if applicable). We’ll work with you and your tax advisor to ensure ownership structure and basis are handled appropriately.

You may still be eligible for the deduction under §167 if you own the land and it’s being used for farming, even if you’re not the one actively farming it. Section §180, which allows for expensing in the year of acquisition, only applies to active farmers — but depreciation is still available for passive owners. We’ll help coordinate the right treatment with your tax advisor.

Yes — this deduction can be valuable regardless of how large or small your farm is. The valuation is based on fertility per acre, not total acreage, which means even modest-sized parcels can generate meaningful tax savings. We work with landowners of all sizes and across a wide range of transaction types. If the land had measurable fertility at the time of acquisition, it’s worth evaluating. We’re happy to help you and your tax advisor assess the opportunity.

While our reports are built for tax purposes, they can also serve as a powerful tool for sellers. Quantifying the fertility embedded in the soil helps demonstrate the agronomic value that may not be fully captured in traditional appraisals. For sellers, this can strengthen negotiations, support premium pricing, or provide buyers with documentation that may help them claim future deductions. We’ve worked alongside brokers and appraisers in these situations to help ensure that the full value of the land is clearly communicated.

Note: While our report quantifies the fertility value for tax purposes, it is not a formal appraisal and should not be used for lending, collateral, or real estate valuation purposes. We’re happy to coordinate with your broker or appraiser when helpful.

We’ll ask for some basic information about the field — including the acquisition date, location, acreage, and any soil sampling or fertilization history you’re aware of. If you have past agronomic testing or yield records, those can be useful, but they’re not required to begin. You can submit everything through our secure intake form here, and our team will guide you through the next steps.

That’s okay — most landowners don’t. We use a combination of public data, regional agronomic benchmarks, and scientifically supported modeling to accurately reconstruct fertility conditions at the time of acquisition. Our approach is designed to work even in the absence of historical soil fertility records.

Yes. If you have recent or historical soil test results, we’ll review them to determine whether they’re suitable for our analysis. We likely will be able to incorporate your existing lab data directly into the valuation, as long as it meets scientific standards.

After you submit the intake form and pay a deposit, we’ll coordinate soil sampling for your field. Sampling is typically scheduled within 2 to 3 weeks, depending on location and field conditions. Samples are then sent to a third-party lab for analysis, which usually takes another 2 to 3 weeks. Once we receive the lab results, we complete the valuation and deliver the final report within 3 weeks. In all, most reports are delivered within 7 to 9 weeks from the time your intake is complete — though we do offer expedited services if needed.

If you have existing soil test results from the time of acquisition that meet our requirements, we may be able to incorporate those instead. In those cases, we can often deliver the completed report within 3 weeks of receiving all necessary information.

Once your report is complete, you’ll receive a preview version in PDF, which provides the headline number but not the supporting details. Upon payment of your remaining balance, you’ll then receive the full report.

We charge a flat per-acre fee based on the number of acres submitted and whether soil sampling is required. If we coordinate sampling and lab analysis, the fee is $40 per acre. If you already have qualifying soil test results from the time of acquisition, the fee is $30 per acre.

Pricing includes scientific analysis, IRS-supported documentation, and direct support for your tax advisor. There are no hourly rates or hidden fees. We will provide a firm quote once we review your intake submission.

In many cases, the ROI exceeds 10x, with some clients seeing returns in the high teens relative to their out-of-pocket costs.

Actual results depend on your field's fertility levels, acreage, and tax situation — but because this deduction directly reduces taxable income, the benefit is often significant.

You can estimate your own return using our ROI Calculator.

Let’s say you have a 320-acre field with $1,500 per acre in excess fertility. You’re in a 35% combined marginal tax bracket, and the total service cost is $40 per acre.

Here’s the breakdown:

• Gross Service Cost: 320 acres × $40 = $12,800
• Tax Savings from Expensing That Cost: 35% × $12,800 = $4,480
• Net Out-of-Pocket Cost: $8,320
• Total Excess Fertility Value: 320 × $1,500 = $480,000
• Tax Benefit from Deducting That Value: 35% × $480,000 = $168,000
• Total Net Financial Benefit: $168,000 – $8,320 = $159,680
• ROI: $159,680 ÷ $12,800 = 12.5x

So in this case, your investment of $12,800 results in nearly $160,000 in after-tax value — a 12.5x return. To adjust this calculation to your field, check out our ROI Calculator.

The report provides your tax advisor with everything needed to apply the excess fertility deduction accurately and defensibly. It includes:

• Scientific Valuation Summary – A clear explanation of our methodology, including how we identified excess fertility present at the time of acquisition using soil chemistry data and agronomic benchmarks relevant to the region and crop type.
• Soil Test Results and Analysis – Lab results (if sampling was conducted) are embedded directly into the report. We analyze key nutrient levels — such as phosphorus and potassium — against scientifically supported baselines to quantify the extent of excess fertility.
• Fertility Valuation Calculation – A detailed calculation of the excess fertility in pounds per acre, converted to equivalent fertilizer units (e.g., P₂O₅, K₂O), and valued using market-based prices in effect near the date of acquisition. The result is a total per-acre and field-level valuation.
• Deduction Modeling – For depreciation-based deductions (i.e., under §167), we include a depletion schedule that reflects the estimated rate at which the excess fertility would be used up through normal agricultural production. This schedule is tailored based on historical cropping patterns and typical nutrient removal rates.
• IRS Framework and Citations – References to relevant provisions of the Internal Revenue Code — including §§ 167 and 180 — as well as interpretive guidance that supports the treatment of fertility as a depreciable component of farmland.

The report is designed to give your tax advisor all the information needed to support the deduction while maintaining scientific and regulatory credibility.

A deposit is due once your intake is reviewed and we confirm that your field is eligible. This deposit covers initial work and, if applicable, soil sampling and lab costs. The remaining balance is invoiced when your report is delivered. We’ll provide a clear breakdown of costs and timing up front so there are no surprises.

Yes — you can submit multiple properties or transactions through the intake form. If different fields were acquired at different times, we’ll treat each as a separate valuation, but the process remains streamlined on your end.

The report is designed for use by your tax advisor and includes all necessary documentation to support the deduction. If your advisor has follow-up questions or needs clarification, our team is available to assist. We don’t charge hourly fees for this — support is included.

Yes (unless you are comfortable filing your taxes yourself). While we provide the scientific valuation and supporting documentation, your tax advisor is the one who applies the deduction on your return. We work closely with tax professionals across the country, but we do not file tax forms ourselves.

Once you receive the final report, you’ll share it with your tax advisor. The report provides all necessary valuation details, regulatory citations, and supporting documentation to justify the deduction. Your advisor will determine the appropriate tax treatment based on your specific situation.

Yes. With your permission, we’re happy to coordinate directly with your advisor to answer questions, explain the methodology, or support them in applying the deduction accurately. We see our role as supporting — not replacing — your existing team.

Absolutely. Many tax advisors haven’t encountered this specific opportunity before, but we regularly assist with background materials and direct communication to make sure they’re comfortable with the science and the tax framework. Our team is available to help them understand how and where to apply the deduction.

Our valuation reports are built with audit defensibility in mind. We document every step — from soil chemistry analysis and agronomic baselines to pricing methodology and IRS framework — so your tax advisor can demonstrate the basis for the deduction clearly. As a third-party valuation firm, we maintain independence from your tax return itself, which strengthens the credibility of the report. If your advisor needs additional support during an audit, we’re available to assist.

The deduction is supported by multiple sections of the Internal Revenue Code, depending on the circumstances. If the landowner was actively farming in the year of acquisition, IRC §180 may allow the fertility value to be expensed in full during that year. Otherwise, the deduction is typically taken under §167, which allows for the depreciation of capital assets that are gradually used up — such as excess fertility.

The appropriate treatment depends on how the land was acquired, how it’s being used, and who is claiming the deduction. For a detailed explanation of the legal framework, see our whitepaper or have your tax advisor contact us directly.

It depends on how the land is used and who is claiming the deduction. There are two primary pathways:

• Under §180, if the taxpayer was actively engaged in farming in the year the land was acquired, the excess fertility may qualify as a fertilizer-related cost that can be expensed entirely in that year.
• Under §167, if §180 doesn’t apply, the excess fertility is treated as a depreciable asset and recovered over time. In these cases, we model the depletion of fertility based on historical cropping patterns and expected nutrient removal through production.

Your tax advisor can determine the right treatment based on your facts, and our reports are designed to support either approach.

You may still be able to claim it. If the land was farmed at the time of acquisition and had measurable fertility, you can often take a “catch-up” deduction using IRS Form 3115 (change in accounting method) or by amending a past return. The timing and tax position matter, so we’ll coordinate with your advisor to determine the right approach. Many landowners pursue this strategy to unlock past basis they didn’t realize was deductible.

In many states, yes — most states conform to federal tax treatment for depreciation and capital asset deductions. However, some states do not follow federal depreciation rules or may require adjustments. Your tax advisor can confirm how your state treats this deduction and whether any modifications are needed for state filing purposes.

Excess fertility is considered part of the property’s basis at acquisition — whether purchased or inherited. Just like tile drainage, irrigation infrastructure, or timber, long-lasting soil fertility is a capital attribute of the land. If fertility exists at the time of acquisition and wasn’t deducted as an operating expense, it can be valued and depreciated over time (or expensed under §180, if applicable). Assigning value to this fertility through a scientific valuation allows your advisor to treat it as a recoverable capital asset, in accordance with the tax code.

The deduction reduces your basis in the fertility portion of the land, which is treated as a depreciable asset separate from the land itself. This may impact future tax treatment if you sell the property — including depreciation recapture or basis allocation in a 1031 exchange. Your tax advisor can help model how this fits into your broader planning.

Claiming the deduction reduces your basis in the fertility portion of the land, which may be subject to depreciation recapture if the land is later sold or exchanged. This is a normal part of claiming any depreciation deduction — just like with farm equipment or improvements. The recaptured amount is typically taxed as ordinary income to the extent of prior deductions. Your tax advisor can help you plan for this and evaluate how it fits into your overall tax strategy.

No — this is a one-time deduction based on the excess fertility present at the time you acquired the land. Once that value is established and recovered through depreciation or §180, it cannot be re-claimed unless a new acquisition resets the basis. This isn’t a recurring deduction, even if the fertility levels change over time due to farming activity.

Fertilizer purchases are typically expensed under §180 as operating inputs in the year applied. The excess fertility deduction, by contrast, is about the long-term fertility that came with the land when you acquired it — not what you added later. That fertility is considered a capital asset and depreciated over time, much like fencing or tile drainage. It’s a separate deduction entirely.

Our whitepaper provides a detailed overview of the legal and scientific foundation for these deductions, including citations to IRS rulings, technical guidance, and valuation standards. We're also happy to speak directly with your tax advisor if they’d like to review the underlying framework.

That’s common, and it doesn’t disqualify you. Our focus is on estimating what fertility existed in the soil at the time of acquisition. Later applications are considered in the context of how the fertility levels changed — but we don’t treat them as part of the original excess.

If you’ve already claimed §180 fertilizer deductions in prior years, those amounts may reduce what’s considered “excess” at the time of acquisition — especially if they occurred close to your purchase date. However, that doesn’t necessarily disqualify the field from a valuation. Our methodology accounts for historical usage, including any prior fertilization, to avoid double-counting. We’ll work with your tax advisor to ensure the deduction is properly scoped.

Yes — we can isolate and analyze specific portions of a parcel, such as areas with different use histories or separate management zones. If part of the field has been continuously cropped while another part was in CRP, for example, we can assess each independently. Just let us know during the intake process, and we’ll tailor the analysis accordingly.

If you own farmland through a general partnership, family partnership, or informal joint venture (e.g., with siblings or heirs), the deduction may still be available. What matters is the entity's basis in the land and whether the fertility at acquisition has already been recovered. We can work with your advisor to evaluate eligibility at the partnership level and ensure proper allocation across partners if needed.

Yes. If land is inherited, the step-up in basis under IRC §1014 may include the fertility component. That means the new owner may be eligible for a depreciation deduction based on the excess fertility present at the time of inheritance — even if they didn’t purchase the land outright. We work with estate attorneys and tax advisors to help determine if the fertility basis can be modeled and recovered as part of broader planning.

Possibly, but it’s uncommon. Land that has been enrolled in the Conservation Reserve Program (CRP) for many years is typically not eligible, since it hasn’t been farmed or depleted during that time. However, if the CRP enrollment began after you acquired the land — and there was measurable fertility present at the time of acquisition — there may still be a path forward. Eligibility depends on the timing of the acquisition, soil conditions, and whether fertility was likely present and unused. We’re happy to review your situation and provide a preliminary assessment.