Land Nutrient Deductions (IRC §180)

IRC §180 Overview

IRC §180 allows certain soil and land preparation costs incurred in farming operations to be deducted rather than capitalized. Proper application requires careful factual and documentation analysis.

CSS Resources evaluates §180 land nutrient deductions using a conservative, audit-aware framework.

Qualifying Land Nutrient Costs

Potentially deductible costs may include:

• Soil conditioning

• Nutrient and fertilizer application

• Land preparation directly related to crop production

Costs must be operational in nature and supported by documentation.

Excluded and High-Risk Costs

We exclude or flag:

• Permanent land improvements

• Drainage systems and infrastructure

• Costs lacking agronomic purpose

• Capital expenditures improperly characterized

Aggressive positions are avoided.

Documentation Review Process

Our §180 review includes:

• Invoice and cost description analysis

• Separation of deductible and capitalizable costs

• Identification of documentation gaps

• Conservative conclusions where facts are incomplete

Who Benefits From §180 Deductions?

§180 deductions may apply to:

• Farming and agricultural operations

• Landowners with recurring soil preparation costs

• Businesses with agronomic support documentation

(A great benefit to go along with this deduction, is a possible Cost Segregation study. The strategies are complementary and may both apply when agricultural properties include substantial building improvements.)