RESOURCES AND FAQS

Deducting Excess Soil Fertility

Resources & common questions about the Excess Soil Fertility Study, including timing, eligibility, and tax benefits.

RESOURCES

Interview with Roger McEowen

Hear from Roger McEowen, a leading agricultural law and taxation expert, as he discusses the complexities of managing excess soil fertility. In this video, he offers practical advice to help landowners and farmers optimize their soil’s potential while navigating legal and tax considerations.

Helpful Articles

Tax Deductions Available for Residual Fertility on Purchased Land

When we typically think of grid sampling, our goal is to locate where nutrients are deficient and in excess across a field. This allows us to target fertilizer applications only to areas that require additional fertilizer and take advantage of the excess nutrients in other areas of the field by reducing the amount of fertilizer in those areas. However, excess soil fertility has value in another way.

Deducting Residual (Excess) Soil Fertility - Does the Concept Apply to Pasture/Rangeland?

When farmland is purchased, depreciation can be claimed on depreciable assets associated with the farmland starting with the first tax year in which possession of the land is taken. The amount claimed is tied to the portion of the total cost of the farmland that can be allocated to any depreciable asset, such as fencing, field drainage tile, grain storage facilities, farm buildings, and irrigation equipment, just to name a few of the more common depreciable items.

What is an Excess Soil Fertility Study?

A soil analysis that determines if excess nutrients qualify for a tax deduction under Section 180.

When is the best time to do a study?

The best time is as close to the purchase date as possible. If that’s not possible, we can still help by using a fertility ledger to estimate past conditions.

Do all fields have excess fertility?

No, it depends on soil history, fertilizer use, and cropping practices. A study determines eligibility.

What crops or land types benefit the most?

Row crop farmland—especially fields with a history of compost or manure applications—typically sees the most benefit.

How long does the process take?

The study usually takes a few weeks, depending on soil testing and report completion.

Is pasture land a good candidate?

It depends—the comparison and calculations are intended for farmland, so the key question is: Do you plan to farm the land or grazing it? If the land will be used for grazing, it’s typically not a fit.

Does CRP going back into production qualify?

It should—the program targets land used for crop production.

How does the tax deduction work?

If excess fertility is found, it may be deducted as a soil amendment expense, reducing taxable income.

What information is needed to start a study?

Ownership, field location, and soil samples are required for an accurate assessment.

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This service does not constitute financial or tax advice. Crop Quest, Inc. shall not be held liable for any direct, indirect, incidental, or consequential damages arising from the use or inability to use the information supplied.