Can You Claim a Section 180 Soil Fertility Deduction When Buying Farmland in Indiana?

Yes. A recent farmland purchase in LaGrange County, Indiana documented $136,476 in excess soil fertility through a Section 180 soil fertility report prepared by Soil Tax Guys.

The property contained $1,364.76 per acre in existing soil fertility value at the time of purchase. Those nutrients became part of the buyer’s investment when ownership transferred and qualified for evaluation under Internal Revenue Code Section 180.

Section 180 Success Story from LaGrange County, Indiana

Client: Steve
Location: LaGrange County, Indiana
Property Type: Row Crop Farm
Section 180 Soil Fertility Value: $136,476.00
Per Acre Soil Fertility Value: $1,364.76

LaGrange County is located in the heart of northern Indiana where productive soils support strong corn and soybean production. Many farms in this region have benefited from decades of fertilizer applications and careful nutrient management, creating the potential for significant residual soil fertility when ownership changes.

When Steve purchased this Indiana farm, Soil Tax Guys completed the soil fertility evaluation to determine the value of the nutrients already present in the soil.

Why Section 180 Matters for Indiana Farmland Buyers

Every farmland purchase includes more than land alone.

It also includes the phosphorus, potassium, sulfur, and other nutrients that previous owners invested in over many years.

These nutrients often represent a meaningful portion of a farm’s value, yet many buyers never measure them.

Section 180 allows qualifying taxpayers to evaluate that existing soil fertility and work with their CPA to determine the appropriate tax treatment.

For many farmland buyers, this is one of the largest overlooked tax planning opportunities available after closing.

Why Soil Testing Is Essential

A Section 180 report begins with accurate soil testing.

The soil samples document the fertility that existed at the time ownership transferred. Those laboratory results provide the foundation for determining the replacement cost of the nutrients contained within the soil.

Without soil testing, there is no reliable method to quantify excess soil fertility.

Whether Soil Tax Guys collects the samples or the buyer provides qualifying soil test results, the goal remains the same. Measure what already exists before additional fertilizer is applied.

Farming in LaGrange County

LaGrange County is known for productive agricultural land and a diverse farming community. Corn and soybeans dominate much of the landscape, with many operations placing a strong emphasis on maintaining soil fertility to maximize long term productivity.

Because fertility programs vary from farm to farm, every property should be evaluated individually. Two neighboring farms may have dramatically different nutrient levels depending on years of management, crop rotation, manure applications, and fertilizer history.

That is why Soil Tax Guys prepares every report using actual soil test results from the property being purchased.

Results

For this Indiana farmland purchase, the completed Section 180 report documented:

Total Soil Fertility Value: $136,476.00
Soil Fertility Value Per Acre: $1,364.76

Many buyers choose to utilize the deduction in the year they purchase the farm, while others work with their CPA to spread the deduction over multiple tax years based on their overall tax strategy.

Frequently Asked Questions

Does Section 180 apply to farmland purchased in Indiana?

Yes. Section 180 is part of the Internal Revenue Code and may apply to qualifying farmland purchases throughout Indiana.

Do I need a soil test?

Yes. Soil testing is the foundation of every Section 180 soil fertility report because it measures the nutrients present when the property changes ownership.

Can I provide my own soil test results?

Yes. Soil Tax Guys can often prepare a report using client supplied soil test results if they meet the necessary timing and quality requirements.

Can the deduction be spread over several years?

Yes. Many buyers work with their CPA to determine whether taking the deduction over multiple years best fits their tax planning goals.

Does every Indiana farm qualify?

Every property is different. The only way to determine the soil fertility value is through soil testing and a professional Section 180 evaluation.

Get a Free Section 180 Value Estimate

If you are purchasing farmland in Indiana, Soil Tax Guys can review your soil test results and provide a free per acre value estimate.

If the property contains meaningful soil fertility value, we prepare a comprehensive Section 180 soil fertility report that provides the documentation your CPA needs to evaluate the deduction.

Whether you are buying your first farm or expanding an existing operation, understanding the value already contained in the soil can have a significant impact on the economics of your investment.

Soil Tax Guys