Residual Fertility Tax Deductions: What You Need To Know To Make A Confident Decision
"Section 180" Tax Deductions Are Gaining Traction, But They're Not New
The IRS has long recognized that soil fertility is part of the value of farmland. When you purchase land, you aren’t just buying acres — you’re also buying the nutrients in the soil. That fertility has always been considered part of the land’s value and is reflected in the sale price you paid.
For growers who purchased land within the last 10 years, the excess fertility present at the time of purchase or inheritance can be documented and treated as a legitimate tax deduction. This isn’t new, and it isn’t a loophole — it’s simply an overlooked part of land value.
If it’s not new, why have I never heard of “Section 180”?
Despite being recognized for decades, this deduction is rarely discussed. Many growers — and even some accountants — aren’t aware of it because:
The tax code is complex, and fertility sits at the intersection of agronomy and finance.
The deduction requires accurate, soil-based documentation to support it.
Few growers have had access to the detailed soil data needed to calculate fertility value correctly.
Accountants typically don’t have agronomic information, so it’s easier to skip the deduction entirely.
Bottom line: It’s not that the deduction is new or fabricated. It’s that the documentation has historically been difficult to produce until now.
Why It’s Not “Too Good to Be True”
Many growers are surprised by the amount of the deduction, but the explanation is grounded, straightforward, and supported by decades of IRS guidance.
The IRS Acknowledged Soil Fertility as a Land Asset Over 60 Years Ago.
It’s part of longstanding tax guidance, not a loophole or new idea. Always consult a tax professional about your situation.
The IRS Requires DEFENSIBLE, SCIENCE-BACKED Proof, Not Guesswork.
A 1990s ruling spelled it out clearly: fertility can be deducted, but only when it’s documented down to the nutrient level.
The VALUATIONS ARE High Because Fertility Was in Your Purchase price.
You didn’t just buy acres, you bought nutrients. The deduction reflects what was in your soil the day you purchased it.
This Isn’t a Loophole. It’s Accounting for What You Already Own.
The deduction doesn’t add or inflate anything, it simply calculates the fertility you purchased but haven’t yet documented.
Common Questions About Residual Fertility Tax Deductions
You’re not alone. These are the questions we hear from growers who manage their operation like a business, and want deductions to be done right.
Why are so many growers asking about residual fertility value now?
Because today’s soil data finally makes it possible to document fertility accurately. The deduction isn’t new, but growers now have access to the level of agronomic detail the IRS expects.
Why haven’t I heard about residual fertility tax deductions before?
Most growers haven’t, not because it’s obscure, but because it requires agronomy and tax knowledge working together. Historically, very few groups connected the two well enough to make it practical.
What makes Advanced Agrilytics different from other groups offering residual fertility valuations?
We don’t estimate fertility value; we calculate it. Our approach uses point-level soil data, nutrient-specific critical levels, and over a decade of verified pricing history. This is the depth of documentation the IRS expects.
How do I know the numbers aren’t inflated?
Every value is tied to:
- the soil sample at that location,
- the nutrient levels present,
- the critical level for that soil, and
- the cost of the nutrient itself (not the product).
There’s no guessing or averaging.
What does “IRS-defensible” actually mean in this context?
It means the valuation can be traced, audited, and explained point-by-point. Our documentation shows the baseline, the excess fertility, the nutrient price, and how the calculation was made, with no black boxes.
What does RFV actually do for me?
RFV takes complex agronomy and tax requirements and turns them into clean, traceable, accountant-ready documentation. Growers don’t have to guess what’s needed, we guide the process.
Will using RFV increase my chances of being audited?
No. The IRS doesn’t audit more often just because someone claims a fertility deduction. What they expect is clear documentation. RFV is built to meet that standard, every value can be traced back to soil data, critical levels, and nutrient pricing. It’s one of the few approaches designed to be fully audit-defensible.
What if I already use large deductions like equipment depreciation?
Many growers do, and RFV works alongside those deductions. What matters is that each deduction is legitimate and well-documented. RFV provides some of the strongest documentation available, which is why growers who already take significant deductions often feel more confident adding this one.
How RFV Fits In To Your Tax Strategy
Residual Fertility Valuation (RFV) is Advanced Agrilytics’ way of helping growers document the fertility they already own — accurately, transparently, and in a format accountants can use.
The RFV Report provides:
- Sample-by-sample fertility calculations
- Agronomic critical levels specific to each sampling location
- Element-level pricing backed by historical data
- Fully traceable documentation designed to support IRS expectations
- A clear, guided process so growers know exactly what’s needed
Our RFV Report simply documents the value of the excess fertility that was already in your soil, using science and data instead of estimates.
Resources Trusted by Growers Across the Midwest
You’re not the only one digging into how “Section 180” works. Whether you’re brand new to the idea or ready to understand the science behind the numbers, these two recorded webinars are the best place to start.
Start here
The "Section 180" Residual Fertility Tax Deduction Explained
Who should watch? Anyone hearing about “Section 180” for the first time.
This session introduces the basics of IRS Section 180 and other residual fertility tax deductions. It covers:
- Why the fertility deduction exists
- How it applies to land you’ve purchased
- What documentation the IRS actually wants
Go Deeper
How Advanced Agrilytics Accurately Calculates Residual Fertility Value
Who should watch? Anyone who wants to know the “how” behind the numbers.
This session takes you inside the science and methodology that make our reports different from simple estimates or averages:
- Nutrient-level calculations
- Point-based sampling requirements
- Why our method stands up to scrutiny
Legal Disclaimer
Advanced Agrilytics does not provide legal, tax, or accounting advice. The information in this document is for general informational purposes only and should not be relied upon as a substitute for professional guidance. We are not certified public accountants (CPAs), attorneys, or tax advisors. Eligibility for IRS Section 180 deductions depends on individual circumstances and is subject to interpretation and approval by the Internal Revenue Service. We do not guarantee results or acceptance of any tax filing or deduction claim. Please consult your CPA or tax professional to determine how this information may apply to your specific situation.