According to Internal Revenue Codes Section 179 (I.R.C. §179) and 180 (I.R.C. §180), farmland buyers, inheritors or recipients of gifted farmland could be eligible to deduct various depreciable farm assets, including but not limited to:
Our ag professionals execute an exclusive, thorough property analysis for all the depreciable assets on a farm and then provide you with a complete 3rd party, agronomically sound report that complies with Internal Revenue Codes Section 179 (I.R.C. §179) & Section 180 (I.R.C §180) guidelines. We can also review the farm lease to confirm it is in compliance with the Internal Revenue Codes Section 179 & Section 180.
These reports can be given to and utilized by your accountant/tax preparer to ensure you receive all of the potential tax deduction on you recently purchased farmland. There could be substantial tax savings waiting for you.
Most landowners and accountants may be familiar with deducting most farm assets like grain bins and fences; However, not many may be familiar with properly deducting excess soil fertility and end up overlooking this opportunity for additional tax deductions.
With Rooster Ag’s agronomy background we have created an exclusive depreciable asset valuation system that allows our experts to provide an accurate, comprehensive analysis that follows agronomics and IRS code.
Our FDAV system is well versed on soil fertility. The system figures out what each State’s or Zone’s optimum soil levels are, how to analyze a soil tests pH, P, K & CEC, and compound those figures accurately in a report. Additionally, the system determines how to apply current fertilizer and limestone costs to the equation, what corn yield that particular CEC grows and how many years it would take to deplete any excess soil fertility if no fertilizer was applied, as well as, ensure that the Farm lease is in fact in compliance. These all are agronomic factors needed to comply with the tax code.
Rooster Ag’ currently provides FDAV services for Iowa, Illinois, Wisconsin, Minnesota, Missouri.
We even back up our work with a guaranteed minimum 100% return on your total tax savings based off a 30% tax bracket.
Be careful of who you align with on farm depreciable asset valuations. Make sure their value calculations are utilizing agronomically sound practices/requirements and following IRS guidelines in order to survive an audit. Most valuations will not! Don’t Fear the “Taxman” when working with Rooster Ag’.
Beneficial Ownership of the Residual Fertilizer Supply
The tax advantage is to be utilized by the owner. The tax preparer can supply this information.
The Presence and Extent of the Residual Fertilizer
As of the date of acquisition, we determine the Residual Fertility Value by analyzing Soil Tests, Fertilizer Prices, and each field’s Optimum Levels of Soil Fertility.
The Residual Fertilizer Supply Exhaustion Schedule
After determining the Residual Fertility Value, we will calculate the time it would take for the excess fertility to exhaust from production if no fertilizer was applied.
“…this is a big one, they (Rooster Ag’) helped do all the analysis and built all the reports so we could take advantage of the IRS Tax Code 179/180. If you do not know what this is, Sec 180 “Residual Soil Fertility Depreciation” and Section 179 pertains to depreciation regarding drain tiles and other items on the property. They worked to analyze each property to make sure we could take full advantage of these programs, and wow, did it save us a ton of money!”
We are proud to offer a free, no strings attached consultation and tax savings estimate to guarantee you are taking advantage of all the depreciable assets on your farm. Please fill out the form below or give Dalton a call to get started!