Introduction: Why Section 180 Matters

For generations, farmers and ranchers have understood that soil is one of their most valuable assets. Its fertility drives productivity, profitability, and long-term sustainability. Yet in the world of tax planning, soil fertility has long been overlooked as an asset with quantifiable value.

One of the most overlooked farm deductions is found in IRS Section 180. This provision allows taxpayers engaged in farming to deduct certain fertility expenditures that would otherwise need to be capitalized. In practical terms, if your soil has excess residual fertility—nutrients above optimum levels—your land may qualify for a Section 180 deduction.

When applied, this deduction can often range between $750 and $2,000 per acre. For landowners managing hundreds or thousands of acres, this can represent a six- or seven-figure opportunity to reduce taxable income. Yet despite being part of the Internal Revenue Code since 1960, Section 180 remains underutilized, largely due to lack of awareness and confusion about eligibility.

This article provides an in-depth look at Section 180 IRS, including what it is, how it works, who qualifies, and how BirdDog helps landowners and CPAs apply it with confidence.

Before You Keep Reading: Important Considerations

Before we dive into the details, a few things you need to take into consideration as you begin your exploration into Section 180:

• Section 180 can be applied in different ways—BirdDog helps landowners unlock it by assigning a monetary value to excess residual fertility in their soil, allowing part of their cost basis to be converted into a deduction.
• If you’ve bought property used for farming purposes in the last 10 years, this article applies to you. (Continue reading for what constitutes as “farming”)
• This article was written to identify elements about the tax benefit that are generally true to all folks who take advantage of it. 
• Every piece of land is unique and thus will be impacted uniquely by this tax benefit. Soil fertility levels, cropping history, and ownership structures vary.
• The results we share on this article are not guaranteed. But we can verify that through our own customers who have seen success on this that the benefit has real measurable results. 
• Section 180 is not “Free money” - it’s a strategy to offset the taxable income through excess residual fertility. 
• This article is not tax advice. BirdDog does not provide tax advice. Our role in the pursuit to utilize this strategy is to provide accurate soil fertility assessments and documentation. You and your CPA’s role is to determine whether and how the deduction applies to your tax strategy.

If you believe you may qualify, we strongly encourage you to contact BirdDog and partner with your CPA to evaluate your options.

Still with me??

Great! Let’s dive in.

What Is Section 180?

IRS Section 180 is a tax provision that can allow farmers to expense certain soil fertility-related costs. Specifically, the statute states:

“A taxpayer engaged in the business of farming may elect to treat as expenses which are not chargeable to capital account expenditures… for the purchase or acquisition of fertilizer, lime, or other materials to enrich, neutralize, or condition land used in farming.” (IRS Code §180, Cornell Law School)

In simpler terms, this means that fertility is not just an operational input—it can be recognized as an asset with real, quantifiable value. If a farm’s soil contains nutrients above “optimum levels,” that residual fertility can be valued and, under Section 180, expensed as a deduction.

Here’s why it matters:

• Immediate Deduction: Instead of depreciating or capitalizing fertility over many years, farmers can take the deduction in the same year, which reduces taxable income.
  
  
• Excess Fertility as Value: Fertility already in the soil, beyond what is needed for a current crop, is recognized as an asset. That means land with higher nutrient levels may carry additional, often overlooked, financial value.
  
  
• Cash Flow Impact: While it’s not “free money” from the government, the deduction lowers taxable income, which can reduce tax liability and leave more money available for reinvestment in operations.
  
  

In our discussions with landowners and their teams, we’ve encountered that many CPAs are familiar with Section 179, which allows for immediate expensing of capital equipment like tractors and combines. In our conversations with landowners and CPAs, Section 180 has been less understood and applied—even though it has been part of the tax code for over sixty years. As a result, many landowners miss out on a deduction that could represent $750 to $2,000 per acre on average, depending on soil fertility levels and current market conditions.

Section 180 can be a powerful, long-standing but underutilized tool that reframes how landowners can view their soil—not just as dirt, but as an asset with measurable economic value.

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What Is “Excess Residual Fertility”?

Residual fertility refers to the nutrients left in the soil after a crop has been harvested. While crops utilize a significant portion of the fertilizer applied during the growing season, not all of it is consumed. Some nutrients remain stored in the soil, bound to soil particles or retained in organic matter. This “residual fertility” can carry over into future years and represents real, measurable value.

When nutrient levels rise above “optimum” agronomic thresholds—meaning there is more than what is required for healthy crop growth—this excess fertility becomes a quantifiable asset. In other words, the soil itself holds value beyond immediate crop needs, and that value can be documented and recognized for tax purposes under IRS Section 180.

Common Nutrients Considered Residual Fertility

• Nitrogen (N): Remains in the soil in several forms, such as ammonium, nitrate, or tied up in organic matter. While some forms are volatile, excess nitrogen can still be measured and valued when present.
  
  
• Phosphorus (P): Frequently bound to soil particles but remains available for plant uptake in subsequent growing seasons. Excess phosphorus is one of the most common contributors to residual fertility.
  
  
• Potassium (K): Stored in soil exchange sites and minerals, potassium is relatively stable and can contribute significantly to residual fertility value.
  
  
• Other Nutrients: Additional nutrients may also factor into residual fertility assessments, though each property’s soil makeup is unique and must be tested individually.
  
  

A Practical Example

Imagine a field where soil testing reveals phosphorus levels significantly above the recommended threshold. While the crop planted this year may not need that much phosphorus, the excess remains in the soil, available for future crops. Under Section 180, the IRS recognizes this surplus fertility as an asset that can be expensed as a deduction—helping to reduce taxable income for the farmer or landowner.

BirdDog’s Role

This is where BirdDog steps in. Through soil fertility testing and agronomic reporting, BirdDog identifies and documents these excess nutrient levels. The data is then compiled into a clear, defensible report that CPAs can use to support the application of the Section 180 deduction.

By combining agronomic science with financial strategy, BirdDog makes what might otherwise be an overlooked or misunderstood soil condition into a tangible financial benefit. 

How to Claim Section 180 for Landowners Who Have Purchased Land in the Past 10 Years

Claiming the Section 180 fertility deduction is a structured process that depends on credible science and careful alignment between the landowner, their agronomic partner, and their CPA. While the process isn’t overly complex, the quality of the documentation is critical. 

Step 1: Soil Sampling and Testing

The process begins with independent soil sampling. This is not a casual “grab a sample from the corner of a field” effort. Instead, fields are divided into zones or grids that represent different soil types and management areas. Multiple soil cores are collected from each zone, then composited for analysis.

• Best Practices: Following agronomic standards for sampling depth, timing, and geographic distribution.
  
  
• Independent Oversight: Using third-party samplers or verified protocols ensures results are unbiased and defensible.
  
  
• Laboratory Analysis: Accredited labs analyze key nutrients including nitrogen (N), phosphorus (P), potassium (K), and other relevant nutrients.
  
  

This step establishes the baseline evidence: without scientifically validated soil data, there is no foundation for claiming Section 180. The IRS requires proof that nutrients exist above agronomic optimum thresholds, and this is the only way to establish that.

Step 2: Agronomic Assessment

Once the lab results are in, agronomic experts compare nutrient levels to recognized thresholds for optimum fertility. Any levels above those benchmarks are classified as excess residual fertility—which the IRS recognizes as an asset that can be deducted under Section 180.

BirdDog processes for Section 180 specialize in this step, translating complex soil science into clear, CPA-ready reports. These reports document not only the presence of excess nutrients but also their quantified value.

Step 3: CPA Review

With the agronomic assessment in hand, the landowner’s CPA reviews the report and determines how to apply the deduction. This is where financial strategy and compliance come together. The CPA ensures the deduction is consistent with the landowner’s tax structure, reporting obligations, and eligibility under IRS rules.

Step 4: Tax Filing

Finally, once the CPA confirms eligibility, the deduction is applied in the landowner’s tax filing. The practical outcome can be a reduction in taxable income, which can lower tax liability in that filing year. The actual impact depends on the size of the farm, fertility levels, and the landowner’s tax bracket.

BirdDog’s Role in the Activating Section 180

While your CPA executes the tax filing, BirdDog specializes in Steps 1 and 2—the agronomic and technical side.

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• We provide verified, accredited, and defensible soil fertility reports.
• Our documentation is tailored for CPAs, ensuring the bridge between land management and financial optimization is seamless.
• We do not provide tax advice or guarantees of savings. Instead, we deliver the asset valuation of your land’s fertility—empowering you and your CPA to make informed, compliant decisions.

In other words, BirdDog transforms soil science into a defensible financial valuation, giving CPAs the tools they need to confidently apply Section 180 where it fits.

How Much Could Section 180 Be Worth?

The financial impact of Section 180 can be significant, but it will always vary depending on the property, its nutrient makeup, and the extent of excess residual fertility present. Typical outcomes we’ve seen in practice show deductions in the range of $750 to $2,000 per acre. When scaled, the numbers are compelling:

• A 1,000-acre farm could represent $750,000 to $1.5 million in deductible value.
• That deduction translates directly into lower taxable income, which can reduce overall tax liability.
  
  

This isn’t hypothetical—it reflects the way nutrient levels are measured, documented, and recognized under IRS code. For landowners, the benefit often feels like "money left in the soil," which, when properly assessed, can have the same financial impact as cash savings at tax time.

Why This Matters

For many farmers and landowners, fertilizer and nutrient management represent a major portion of operational expenses. In fact, the USDA’s Economic Research Service consistently reports that fertilizer costs account for 15–20% of annual farm operating expenses. By acknowledging residual fertility as a legitimate, deductible asset, Section 180 aligns tax code with the financial realities of modern agriculture.

Instead of viewing fertilizer as a sunk cost, Section 180 creates an opportunity to leverage soil fertility as an asset—one that can provide immediate financial relief while also reinforcing good stewardship practices.

Important Considerations

It’s important to stress that outcomes are not guaranteed. Each property is unique, and results depend entirely on soil test data and nutrient thresholds. BirdDog works with landowners and their CPAs to provide the agronomic data and verified reporting needed to evaluate eligibility. This ensures any deduction claimed is defensible, compliant, and in the best interest of the landowner’s financial strategy.

Our role is not to promise tax savings or offer tax advice, but to deliver a professional, CPA-ready valuation of the land’s fertility assets. From there, landowners and their tax advisors can make an informed decision about whether Section 180 is the right fit.

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Land Must Be “Used for Farming”

As mentioned earlier, let’s dive into what “Farming” means as it pertains to section 180.

Eligibility for IRS Section 180 deductions depends heavily on how the land is classified and used. The IRS states that deductions are only available to taxpayers “engaged in the business of farming.” This phrase sets clear boundaries around what qualifies and what does not.

What Qualifies as “Farming”

Land that falls under the IRS’s definition of farming includes:

• Crop Production: Row crops (corn, soybeans, wheat, cotton, etc.), specialty crops, and vegetables.
• Livestock Operations: Cattle, hogs, sheep, poultry, and other livestock enterprises.
• Perennial Crops: Orchards, vineyards, nut groves, and similar long-term farming systems.
• Mixed-use Agricultural Operations: Farms that combine crops and livestock in rotational or integrated systems.
  
  

These activities show clear engagement in farming as a business, which is the core requirement.

What Does Not Qualify

Certain land uses are excluded from Section 180 eligibility, including:

• Recreational or Hobby Land: Properties used primarily for hunting, fishing, or personal enjoyment without commercial-scale farming operations.
• Hobby Farms: Small-scale production where the IRS determines farming is not a genuine business but a personal activity.
  
  

In short, if the land does not demonstrate farming as an income-producing activity, it won’t qualify.

Clarifying “Engaged in the Business of Farming”

The IRS uses this term to differentiate between commercial operations and hobby activities. Indicators that you are engaged in farming include:

• Regular planting, harvesting, and marketing of crops.
• Reporting farm income and expenses on tax returns.
• A clear business intent to generate profit, even if some years result in losses (common in agriculture).
• Maintaining operational records, labor, and investments typical of a farm business.
  
  

Why This Matters for Section 180

Section 180 allows taxpayers to deduct the value of fertility inputs and excess residual fertility in their soil, but only if the land itself qualifies as farmland. That means the first step in determining eligibility is ensuring the land use aligns with the IRS definition.

BirdDog’s Role in Eligibility

BirdDog helps landowners by evaluating land use history and current operations to confirm whether their property meets the IRS definition of farming. This includes reviewing cropping history, livestock activity, and other records that demonstrate bona fide farm use. By confirming eligibility upfront, BirdDog ensures that CPAs have the documentation they need to confidently apply the deduction where appropriate.

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When Did Section 180 Start?

IRS Section 180 is not a new tax provision—it has been part of U.S. tax law for more than six decades. It was enacted in 1960 under Public Law 86–780, at a time when policymakers recognized both the growing costs of fertilizer and the essential role of soil fertility in American agriculture.

An Opportunity That’s Been Overlooked

Despite being on the books for more than 60 years, awareness of Section 180 remains surprisingly low in our conversations with landowners and CPAs. Most CPAs are well-versed in Section 179 (capital equipment expensing), but far fewer have applied Section 180 in practice. Many landowners and their advisors simply don’t realize that excess residual fertility in the soil qualifies as an asset eligible for deduction.

This lack of awareness and execution has left an unimaginable amount in potential deductions untapped across U.S. farmland. BirdDog’s mission is to bridge that gap by combining agronomic expertise with financial strategy—helping landowners and CPAs recognize and apply a long-standing tax provision that was designed specifically for them.

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Important: Section 180 is Not “Free Money” — It’s a Tax Optimization Strategy

It’s important to clarify: IRS Section 180 is not a government handout or free money. 

Instead, it is a tax optimization strategy that allows farmers and landowners to reduce their taxable income based on the scientifically verifiable fertility already present in their soil.

Here’s what that means in practice:

• No New Funds Created – Section 180 does not put new dollars in your pocket out of thin air. Rather, it can allow you to deduct the quantifiable value of nutrients that exceed optimum thresholds.
  
  
• Tax Liability Reduction – By deducting that value, you might be able to lower your taxable income for the year, which can significantly reduce the taxes owed. The actual financial impact depends on your acreage, fertility levels, and tax bracket. Please consult your CPA for potential financial implications
  
  
• Science-Based Validation – All deductions are based on accredited soil sampling and laboratory testing. Excess nutrients—such as nitrogen, phosphorus, or potassium—are measured against agronomic benchmarks, ensuring a defensible, data-backed report for your CPA.
  
  
• Think of It as Conversion – Instead of leaving untapped fertility invisible in the ground, Section 180 can allow you to convert that fertility into a financial deduction. You’re simply recognizing the asset value of your soil in the tax code.
  
  

In short, Section 180 can help align tax treatment with the economic reality of farming inputs. Fertility costs are among the highest expenses in agriculture, and Section 180 ensures those investments—and the fertility they leave behind—are accounted for in a way that benefits landowners.

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Is Section 180 Right for Me?

Whether Section 180 applies to you depends on your land’s characteristics and your tax strategy. Unlike a one-size-fits-all deduction, Section 180 is highly dependent on soil fertility levels, land use, and how you file taxes.

Here are the key questions to consider:

• Does your soil test above optimum fertility levels?
  Section 180 is only applicable when residual nutrients in your soil—such as nitrogen, phosphorus, or potassium—exceed agronomic thresholds. Without soil tests, you won’t know if your land qualifies.
  
  
• Is your land actively used in farming?
  To qualify, the land must meet the IRS definition of farming. This includes row crops, orchards, vineyards, and livestock operations—but excludes timberland or purely recreational property.
  
  
• Do you file taxes as a farmer, rancher, or agricultural entity?
  Section 180 is specifically for taxpayers “engaged in the business of farming.” Hobby farms or lifestyle properties typically do not qualify.
  
  
• Have you purchased the land within the past 10 years?
  While Section 180 applies more broadly, the biggest opportunities often occur shortly after a land acquisition when fertility levels are high and costs can be most impactful.
  
  

Why a CPA Review Matters

Even if you answer “yes” to these questions, Section 180 isn’t automatic. Every farm and ranch is unique in its soil makeup, land use, and financial structure. That’s why BirdDog partners directly with your CPA, providing scientifically verified fertility reports that they can confidently apply.

We’ve helped validate millions of acres across the U.S., and in many cases, Section 180 has led to significant tax optimization for landowners. However, it’s critical to underscore that this is not guaranteed. The final decision rests between you and your CPA, with BirdDog providing the defensible data to make that decision with confidence.

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How BirdDog Helps

At its core, BirdDog exists to make Section 180 accessible, transparent, and actionable for landowners. While CPAs understand tax strategy and agronomists understand soil science, very few bring these two disciplines together in a way that generates measurable value for landowners. BirdDog fills that gap.

Here’s how we do it:

• Soil Fertility Testing – We work with independent, accredited labs to gather precise, defensible soil data. Sampling is conducted methodically across your fields to ensure accurate representation of nutrient levels.
  
  
• CPA-Ready Reports – Our agronomic assessments don’t stop at raw data. We translate the soil science into clear documentation of excess residual fertility above optimum thresholds. These reports are formatted specifically so CPAs can review and apply the findings confidently under IRS Section 180.
  
  
• BirdDog guides you from start to finish for excess residual fertility testing and report compilation. We manage the logistics of soil testing, interpret results, and collaborate directly with your CPA, ensuring the process is smooth, credible, and defensible.

It’s important to emphasize:

• BirdDog does not provide tax advice.
• Our role is to provide the valuation of the asset—the fertility in your soil.
• Your CPA makes the final determination on how to apply the Section 180 deduction.
  
  

Why It Matters

Section 180 is underutilized not because it lacks value, but because it sits at the intersection of two specialized fields. By connecting the agronomic expertise with tax application, BirdDog makes it possible for landowners to recognize the value already present in their soil, all while giving CPAs the defensible data they need to act.

Learn more here: BirdDog Section 180 Services

Conclusion

IRS Section 180 represents one of the most overlooked opportunities in farm tax strategy. For more than 60 years, it has provided a pathway for farmers and landowners to recognize the real economic value of fertility already present in their soil. When applied correctly, it doesn’t create “free money”—but it does create meaningful financial impact by reducing taxable income in a defensible, science-backed way.

By quantifying excess residual fertility, landowners gain more than just a deduction:

• Financial Relief – Lower taxable income and reduce tax liability.
• Operational Insight – Understand the nutrient value already in your soil.
• Stewardship with Confidence – Align financial strategy with conservation-minded land management.

But Section 180 is only as effective as the process behind it.

That’s where BirdDog comes in. We bridge the gap between agronomy and accounting by delivering soil fertility testing, defensible reports, and end-to-end support that empowers CPAs to apply the deduction with clarity and confidence. We provide the data, documentation, and partnership that make the strategy possible.

The result?

A simple, streamlined, and credible way for landowners and CPAs to work together toward smarter outcomes.

See if your land qualifies today. Contact BirdDog to start the conversation.

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