Turning Soil Into Dollars: How Section 180 Can Put Money Back in Your Pockets
Most farmers know what their soil can grow. Fewer know what it might be worth—right now—when it comes to taxes.
Buried in the IRS code is a little-known rule called Section 180, and it can be a game-changer for anyone buying or inheriting farmland. It basically says:
“If your soil already has fertility in it when you acquire the land, you might be able to deduct that value as an expense.”
Sounds strange? Let’s unpack it.
So What Is Section 180, Really?
Think of Section 180 as a way to get credit for what’s already in your dirt. Normally, fertilizer or soil conditioners are considered capital costs—you spread the cost out over years. Section 180 flips that: it lets you deduct those fertility costs right away, the same year you buy or inherit the land.
That means the nutrients already in the ground—phosphorus, potassium, calcium, sulfur, and so on—could actually count as a business expense. And that can mean serious tax savings.
Some landowners have found $1,000 to $1,700 per acre in fertility value. Results depend on your soil, location, and crop history, but it’s worth a look.
Why It Matters
For most of us, cash flow is king. Section 180 gives you a chance to reclaim part of what you already own—without waiting years for depreciation.
It’s also a great reality check on your land investment. Knowing exactly what nutrients you’re sitting on helps you plan inputs more precisely, negotiate land prices, and better understand your true cost of production.
In short: it’s good tax strategy and good agronomy.
Who Qualifies (and Who Doesn’t)
To qualify, you must:
- Be actively farming or ranching, not just renting or holding land.
- Have purchased, inherited, or exchanged the land—you need a tax basis. Be using the soil for production (row crop, pasture, hay, etc.).
- Have acquired the land after January 1, 1960.
And here’s what won’t fly:
- Gifts, because there’s no tax basis.
- CRP acres while they’re still under contract.
- Fields that have already been sampled and claimed without resampling.
The Secret Ingredient: Measurement
Here’s the catch—the IRS doesn’t take your word for it. You need data. That means professional soil sampling, lab analysis, and documentation that proves what’s in your soil at the time you acquired it.
A quick do-it-yourself test or a coffee-shop estimate won’t cut it. You’ll need verifiable reports that can stand up if the IRS ever asks questions.
That’s where EarthOptics comes in.
How EarthOptics Makes It Easy
We handle everything from field to file, so you don’t have to juggle labs, maps, and paperwork.
- We sample your soil using proven, high-accuracy methods.
- Our in-house lab analyzes nutrient content and fertility levels.
- You get a simple report that quantifies your soil’s fertility value and supports a Section 180 claim.
- We connect you with a trusted affiliate who can help you complete the filing process with your CPA.
It’s a clean, three-step process that leaves you with both solid tax documentation and a better understanding of your soil.
More Than a Tax Deduction
Even if you never file under Section 180, soil measurement pays off in other ways:
- Smarter fertilizer decisions: Apply what you need, where you need it.
- Long-term land value: Track changes in fertility, structure, and yield potential over time.
- Carbon and sustainability programs: The same data supports carbon credit and regenerative agriculture initiatives.
- Peace of mind: Good records protect your operation in audits, appraisals, or estate transfers.
Accurate soil data is the foundation for better management decisions—and better margins.
This blog isn’t tax advice, but it’s a good nudge to start the conversation with your CPA—and to get your measurements lined up early.