How it works
From a first conversation to a report your CPA can review.
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1
Opening discussion
We talk through your land: when and how you acquired it, how many tillable acres it has, whether you farm it or rent it out, and whether it was rented before you owned it. If an evaluation doesn’t look worthwhile, we’ll tell you.
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2
Data collection
We gather the soil test reports for your fields and any supporting information — crop history, yields, and fertilizer records. If your soil was not tested in the year you acquired the land, a test from a nearby year can often still be used: we account for the nutrients each crop removed and the fertilizer applied in between.
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3
Analysis
For each field we compare the soil’s nutrient levels with the levels needed for normal crop production. Nutrients above those levels are the residual fertility. Each is valued using fertilizer prices from the year you acquired the land.
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4
Results
You receive a residual fertility report with a whole-farm summary, a page for each field, an example deduction schedule to help the conversation with your CPA, and the laboratory soil test reports behind the numbers. Reports are delivered through a secure client portal where you can download them anytime.
How residual fertility can matter at tax time
When you buy or inherit farmland, part of its value is the fertility already built up in the soil. Left alone, that value simply becomes part of the cost of the land, which generally isn’t depreciable.
Depending on your facts and circumstances, a tax professional may evaluate whether some of that value can instead be treated under Sections 180, 167, 168, 611, or other applicable provisions of the Internal Revenue Code. That decision belongs to you and your tax advisor — our role is to provide the analysis and documentation they need to evaluate it.
What’s helpful to have
- Date the land was purchased or inherited
- Tillable acres for each field
- Soil test reports (any years you have)
- Crop and yield history since the soil test or acquisition
- Fertilizer and lime application records, if available
- Your CPA’s contact information