Fertility depreciation is a tax deduction that lets agricultural landowners account for the nutrient value already present in their soil at the time of purchase or inheritance. Because soil nutrients are a depletable asset, the IRS allows their value to be documented once and depreciated or expensed over time.

Most FDI clients see documented fertility value in the range of $500 to $2,000 per acre, and sometimes considerably more depending on soil type, region, and management history. The exact figure depends on your soil samples, not on an average.

- Each soil sample is GPS-located.
- FDI maintains full traceability of collection points and methods.
- This ensures credibility and defensibility of results if reviewed.

Yes. FDI offers ongoing assistance, including:
- CPA coordination for accurate filing.
- Documentation for future audits.
- Guidance on applying deductions for newly purchased or inherited land.

When you acquire farmland, you're paying for more than the dirt — you're paying for the macro and micronutrients in it. Soil testing quantifies that residual fertility, an agronomist assigns it a fair-market value, and that value becomes the basis for a deduction under the IRS code sections that cover natural resource depletion and depreciation.

FDI provides::
- Soil sampling and nutrient analysis.
- Reports detailing nutrient volumes and values.
- Documentation to support your deduction claim.
- Coordination with your CPA to ensure accuracy and compliance.

FDI provides a 4-year straight-line depreciation schedule as a general guideline. Your CPA may recommend a different schedule based on your operation and tax strategy.

Yes, under Section 180, active farmers and ranchers can deduct 100% in the filing year. Alternatively, you can amortize under Sections 167, 168, or 611, spreading it over 3–7 years. Any unused portion can be carried forward.

Section 180 lets active farmers immediately expense the value of fertilizer and soil nutrients in the year they're acquired with the land. It's the most direct path to capturing residual fertility value on a tax return, and it's the section most fertility depreciation conversations center on.

Yes. Any purchase price allocated to fertilizer value is treated as ordinary income for the seller, rather than capital gain.

Section 611 covers depletion deductions for natural resources, including the nutrients and minerals contained in soil. It's part of the legal foundation that recognizes soil nutrients as a depletable asset rather than part of the land itself.

The Market Segment Specialization Program (MSSP) audit guide from 1995 reinforced PLR 9211007 by giving IRS examiners specific guidance on what to look for in fertility deduction filings. It emphasizes verifiable soil data and clear ownership of the nutrient value at the time of acquisition — exactly what FDI documents.

If land was partly owned through an LLC and later fully acquired, the deduction period starts when full ownership is gained. If land was owned individually and then transferred to an LLC, the original ownership date applies. The IRS generally treats individual and LLC ownership the same for this deduction.

Your CPA handles the audit. FDI supports by:
- Providing detailed reports and sampling data.
- Explaining methodology to the auditor if needed.
- Ensuring all data aligns with IRS standards.

- The deduction reduces your land’s basis, which can increase taxable gain at sale.
- Recapture may be taxed as ordinary income or capital gain, depending on nutrient depletion.
- For inherited land, the basis is reset, eliminating prior recapture issues.

Yes. If you reinvest sale proceeds in a new property, the deduction and any gain can be deferred through a 1031 exchange.

Sections 167 and 168 govern depreciation and amortization more broadly. For landowners who don't qualify for Section 180 — for example, investors who don't actively farm — these sections allow the residual fertility value to be depreciated over multiple years rather than expensed immediately.

PLR 9211007 is a 1991 IRS ruling that outlines what's required to claim a fertility-related deduction: proving nutrient presence, establishing fertility levels, and documenting depletion over time. It's one of the two cornerstone IRS authorities behind the practice.

Not usually. Section 180 typically applies to active farmers expensing fertility in the year of acquisition; Sections 167/168 and 611 cover depreciation or depletion over time for other situations. Your CPA will choose the right path based on how you use the land and how you want to handle the deduction.

Yes. Partnerships or LLCs can amend their operating agreements to:
- Allow one member to fund and receive the deduction.
- Assign the full benefit to specific members.
- Keep in mind that the entire deduction amount is subject to recapture when the land is sold.

Cropland, pasture, ranchland, and timberland used for agriculture all typically qualify. The strongest cases are land that has been recently purchased or inherited, especially properties with a step-up in basis.

FDI uses soil nutrient forensics to estimate what nutrients were in the soil at the time of purchase or inheritance. This includes:
- Reviewing fertilizer application and crop production records (for cropland).
- Reviewing grazing history, stocking rates, and fertilizer use (for ranchland).
- Adjusting current soil test results to reflect the original nutrient levels.
- Matching those nutrients with historic fertilizer prices for that year.

Yes. Pasture and ranchland used for grazing are eligible. Nutrient profiles look different from row-crop ground, but the documentation principle is the same.

No. Both active farmers and non-operating landowners can document fertility value. The IRS code section your CPA uses to claim the deduction may differ — Section 180 for active farmers, Sections 167/168 or 611 for others.

There's no hard cutoff, but the strongest cases are properties acquired within the last several years — especially those with a documented step-up in basis. Older acquisitions can still be evaluated; we'll help you understand the trade-offs.

Yes, land bought or inherited within the last 15 years can qualify. Older transactions are usually less beneficial because fertilizer prices and nutrient loads were lower in the past. FDI generally recommends focusing on properties purchased or inherited from 2010 onward.

Yes, and it's often the highest-value scenario. Inherited land typically receives a step-up in basis to fair market value, which creates a fresh baseline for documenting residual fertility.

Conservation Reserve Program (CRP) land does not qualify for fertility depreciation. Conservation easements that still allow farming may qualify; we'll confirm based on the easement language.

Timberland used for agricultural production can qualify. Whether it makes financial sense depends on the soil profile and how the land is being managed — we'll tell you straight after a quick review.

Most FDI engagements take roughly two to three weeks, including sampling, lab testing, analysis, reporting and delivery. Timelines may extend during Midwest harvest season.

No. Most clients give us field access information and we handle it from there. We coordinate with operators or tenants when needed.

Sampling density depends on field variability, soil type, and parcel size. We prefer to work with 10-acre grids. Our agronomists design a protocol that captures enough detail to support a defensible report without over-sampling unnecessarily.

Every FDI report includes verified soil test results, an agronomic interpretation, a fair-market value calculation for the residual fertility, and everything your CPA needs to support the deduction. It's written to be reviewed by professionals.

Yes. Documented fertility value strengthens land valuation for estate planning, sale negotiations, and refinancing — not just income tax deductions. Several of our partner CPAs and brokers use FDI reports specifically for these scenarios.

Soil sampling is most reliable in the post-harvest window, but the right timing depends on your crop, your region, and your goals. We coordinate with your operator so sampling fits the field, not the other way around.

FDI will need records from that period, such as:
- Fertility applications and crop yields for cropland.
- Grazing records or stocking rates for ranchland.

There's no hard cutoff, but the strongest cases are properties acquired within the last several years — especially those with a documented step-up in basis. Older acquisitions can still be evaluated; we'll help you understand the trade-offs.

Yes, and we encourage it. Most of our clients introduce us to their accountant early so the report integrates cleanly into year-end planning. We're available for follow-up questions from you or your CPA at no extra charge.

We operate in all 50 states.