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Section 180 Deductions

Land Used in Farming & Deductible Costs for Agricultural Production

Pre-existing soil fertility can potentially provide a vehicle for Section 180 Tax Deductions, given certain qualifications on farmland purchased or inherited.

More Land Value. Since 1977.

Adding Value to Farmers & Landowners

Have your purchased or inherited farmland in the last year? 3 years? up to 15 years ago? If so, you may qualify for an IRS Section 180 tax deduction. Our most satisfied clients who've inherited farms or recently investing in farms or land used in their qualified farming operation can attest to the value we add by helping them uncover additional tax deductible benefits. Since 1977, we've advised & helped landowners & investors navigate the successful purchase of farmland, and maximize the value for the best returns. Whether it's hundreds of acres or the family farm; Start a Conversation Today.

Challenges

While the first steps & questions may seem overwhelming, we’ve been helping landowners like you Since 1977.

Wondering how you can maximize the value of your recent farmland investment? or seeking additional improvements that are tax deductible on a farm?

Do you have a CPA who is familiar with the process? If not, we can help. Unsure if you qualify?

While somewhat complex, with proper documentation, the process can be very smooth and friction free.

 

Answers & Solutions

Start a conversation with a Trusted Advisor & Broker. 

Known as segregating fertility costs, or deducting residual soil fertility, Section 180 allows farmers and qualified landowners to elect to deduct the cost of “fertilizer, lime, ground limestone, marl, or other materials to enrich, neutralize, or condition land used for farming.” If a farmland owner does not make this election, the cost of the fertilizer or other material is amortized over the useful life of the material.

Remember, if the farmland was previously rented and the fertility costs were already deducted, they may not be deducted again. Proper documentation is essential for claiming the Section 180 deduction.

You Deserve More Land Value.

How Successful Sellers Divide Farmland Equally

5 Ways to Avoid Family Farm Inheritance Problems.

How Successful Sellers Divide Farmland Equally

5 Ways to Avoid Family Farm Inheritance Problems.

Our Values

  • Honoring Tradition

  • Grounded in Belief

  • Valuing Hard Work

  • Respecting the Land

  • Honoring Tradition

    Since 1977, We’ve Valued Farmers and Landowners.
    The Stewards of our great natural resources.

    We tip our hats to continual investment & preservation of soil, water, nutrients, and natural landscapes – sustaining our livelihood today and for generations to come.

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  • Grounded in Belief

    Whether we’re leaving it better than we found it, serving our local communities, or our
    higher purpose; our beliefs are the core of our actions.

    • Build a company that is significant and kind
    • Put the well-being of our people before profit
    • Remain honest in intentions and actions
    • We acknowledge our errors
    • We strive for continuous learning & improvement
    • Our clients’ best interests & goals guide our daily work

    More Value.
    Better Returns.

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  • Valuing Hard Work

    Since 1977 we’ve been dedicated to going to work for our clients. A team of full-time land professionals focused on adding more value. We have built an organization with its roots in a strong work ethic, dedication to customer service & communication, and a passion for getting the job done right.

    We know how to make an impact when it comes to:

    • Higher sale price
    • Shorter time on the market
    • Smoother closings

    Personal. Professional. Knowledgeable.
    Confident. Capable. Diligent.
    Expect More Value.

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  • Respecting the Land

    We’re rooted in the pursuit of progress in agricultural land, timber, and natural resources.

    Our Vision

    Working with those who value land, where landowners are celebrated for their work to support farmers, sustainable agriculture, enhancing natural landscapes & wildlife, while helping local communities thrive.

    Our Purpose

    Our purpose is to advance the connection of buyers and sellers of land in ways that are more beneficial for people and the planet.

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Our Team

"We care deeply about our clients and the work we do to solve family farm inheritance and undivided ownership challenges. Since 1977 our team has helped landowners through the challenges & success stories of the once-in-a-lifetime sale of the farm or inherited land."

Johnny Klemme, Advisor & Partner

Johnny Klemme

Nicholas George

Craig Stevenson

Chris Turnbell

Kyle Wilkinson

Jacob Hogan

Serving Landowners Since 1977

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  • Concerns with Section 180

  • Top Questions & Answers

  • Due Diligence

  • Value & Appraisals

  • Property Law & Accounting

  • Concerns with Section 180

     

    1. Complexity and Understanding:
      • Many landowners find the specifics of the Section 180 tax code complex and difficult to understand. They may fear incorrectly interpreting the regulations, leading to potential errors on their tax returns​ (CropWatch)​​ (National Land)​.
    2. Documentation and Compliance:
      • Proper documentation is essential for claiming the Section 180 deduction. Landowners may worry about the accuracy of soil sampling and the requirement to prove “excess” fertility levels. Fears about maintaining adequate records and the potential for audits also cause concern​ (U of I Tax School)​.
    3. Eligibility and Restrictions:
      • Concerns about whether their expenditures qualify for the deduction and the possibility of restrictions or limitations on what can be deducted are common. For example, if the land was previously rented and the fertility costs were already deducted, they cannot be deducted again​ (Center for Agricultural Profitability)​​ (LII / Legal Information Institute)​.
    4. Tax Implications and Recapture:
      • There are fears about the long-term tax implications, such as the recapture of deductions if the land is sold later. The recaptured amount is treated as ordinary income, which could lead to a higher tax liability compared to capital gains treatment​ (U of I Tax School)​.
    5. Economic Viability:
      • Soil testing is increasingly more efficient and cost effective. While some landowners question whether the deduction will provide significant tax savings, considering the costs associated with soil testing and documentation it is often very well worth the time and effort. Many farmland owners are able to realize over $1,000 per acre in benefits​

    These concerns highlight the importance of consulting with a knowledgeable tax professional or CPA who can guide landowners through the process and ensure they maximize the benefits while remaining compliant with IRS regulations.

    Since 1977

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  • Top Questions & Answers

     

    1. What is IRS Section 180? IRS Section 180 allows farmers to elect to treat expenditures on certain soil treatments and conditioners, such as fertilizer, lime, and marl, as expenses deductible in the year incurred rather than capitalizing them. This can provide immediate tax relief for farmers.
    2. How does Section 180 work? Section 180 permits farmers to deduct the cost of soil amendments used to enhance land productivity. The deduction applies to expenditures made for materials to enrich, neutralize, or condition land used in farming. The election must be made within the time prescribed by law for filing the return for the taxable year, and once made, it cannot be revoked without the consent of the IRS​ (CropWatch)​​ (Center for Agricultural Profitability)​.
    3. Who qualifies for the Section 180 deduction? To qualify for the Section 180 deduction, a taxpayer must be engaged in the business of farming. The deduction is applicable to land used for producing crops, fruits, or other agricultural products, or for the sustenance of livestock​ (LII / Legal Information Institute)​.
    4. What types of expenditures can be deducted under Section 180? Expenditures that can be deducted include costs for fertilizer, lime, ground limestone, marl, or other materials used to enrich or condition farmland. The deduction applies only to the portion of the expenditures that exceed normal soil fertility levels, meaning only the “excess” fertility can be deducted​ (U of I Tax School)​.
    5. How can I maximize my tax savings with Section 180? To maximize tax savings, it is advisable to conduct soil sampling before or shortly after acquiring farmland. This will help determine the amount of excess soil fertility present. Documenting these findings through a detailed report from a soil testing company and consulting with a CPA can ensure the deduction is accurately claimed. This process can potentially save thousands of dollars in taxes for farmland purchases​ (National Land)​.

    These questions and their answers provide a foundational understanding of how Section 180 works and its benefits for those in the farming business. For further details, it’s best to consult a tax professional or refer to authoritative sources like the IRS and agricultural extension services.

    Since 1977

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  • Due Diligence

    Question & Answer Consultation

    Having family farm inheritance problems?

    There are many case studies and examples of how we have helped farm families and landowners with their undivided ownership challenges and dividing farmland equally. Splitting a farm  One of best steps you can take is to get the advice of an advisor/ broker, accountant, and/or attorney. You need the right people on your team to successfully value and sell your interest in the real estate, as well as understand the potential tax consequences you may incur.

    Since 1977

  • Value & Appraisals

    Market Analysis of the Property

    As a starting point, putting a value or price per acre on farmland is a necessary part of how you sell an undivided interest in land. In some cases, the basis or value of the land at the time of inheritance, or date of death (DOD),  may also require a valuation or appraisal. A ‘stepped up basis’ or current value of the land assets today will become the foundation for the strategy of the sale, or real ‘division’ of the farmland.

    Since 1977

  • Property Law & Accounting

    Indiana property law may come into effect during the sale of your undivided interest. This is typically the last resort, and we do our best to avoid this whenever we can. That said, some family members and landowners may not agree on value, discounts for the undivided interest, or the timing or method of sale.  When land is similar or “like kind” in soils, drainage, number of acres of tillable vs. non tillable, we often find the process to be simplified.  Regardless of the path forward, we always advise that we loop in your accountant and attorney, as they are the experts on real estate property laws, regulations, and requirements.

    Since 1977

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What People Are Saying

"We knew we could trust Geswein Farm & Land. "

We knew we could trust Geswein Farm & Land. We have known Geswein Farm & Land for many years and knew we could trust them to handle such a large transaction for us. We were quite surprised when our family farm sold very quickly for a very fair price in today's market.

Leuck Family, 102 Acres

"We recommend Geswein Farm and Land Real Estate without reservation."

Consummate Professionals, Excellent & Timely communicators. They know the farming culture in Indiana, had interested buyers in hand from the beginning, helped us understand how to value our land. Found buyer who cares about land stewardship, which is important to us. We were pleased with the agreed upon price and the expedited closing. They also handled related details such as the farm survey flawlessly. We recommend Geswein Farm and Land Real Estate without reservation. Would use them again in a minute.

Abolt Family, 326 Acres

Indiana Farmland w/ Turbines

"Helped make selling the family farm much easier."

Helped make selling the family farm much easier. Ed & Johnny helped make these challenging decisions much easier and the entire process was very smooth.

Wetli Family, 194 Acres

"They are most knowledgeable farm and land real estate brokers I have ever worked with"

We highly recommend Geswein Farm & Land. Their knowledge of real estate & perhaps equally importantly, their sensitivity to people’s memories and experiences make them an outstanding listing agent. They are most knowledgeable farm and land real estate brokers I have ever worked with and ALWAYS available to answer questions and offer help.

Benson Family, 144 Acres

"Working with Johnny was a real pleasure."

We highly recommend their services to sellers. Working with Johnny was a real pleasure. He was knowledgeable, respectful, proactive when things began to happen quickly and thorough when we worked towards and ultimately through closing. My sisters and I appreciated his gentle heart towards us in light of the circumstances of our sale. He kept in close contact with us from the onset right through to the day we closed. He has even checked in a few times since then to see how we are doing. We highly recommend his services to a potential seller (or buyer for that matter!)

Johnson Family, 80 Acres

"Skilled, Caring and Professional; we highly recommend them."

We live in California but own a farm in Indiana. We found Geswein Farm & Land online and we sure are glad we did. We had a significant family ownership challenge with no easy answer. At first, we were hesitant with the proposed solution, but it turns out they were right. Now our family is on good terms again. Their team is skilled, caring, and professional; we highly recommend them.

Leach Family, 160 Acres

Warren County

"Experienced & Proactive Advisors & Brokers"

This team took care of every aspect of the sale including appraisals, management of the process, and negotiations on our undivided interest farms that are over 1,500 miles away from where we live. As an out of state landowners, we were impressed by the way they kept us informed and involved in every step of the process; their knowledge and experience in farmland sales in this region as well as their ability to interact with every member of our family was instrumental to the successful sale of farmland assets.

Morgan Family, 312 Acres

Indiana

"Prompt with Communication & Thorough in Details"

My family and I had a great experience with Geswein when purchasing our property. We would highly recommend Chris Turnbell. Chris was prompt with communication, thorough with specific details, and left us feeling like we could count on him. He is refreshingly down to earth, level headed, and knowledgeable in his field. He worked hard to get needed information quickly, and made us feel like a priority.

Cage Family, 80 Acres

Indiana

"Knowledgeable & Experienced Brokers "

I highly recommend Geswein and specifically Johnny. I had every confidence in his knowledge and expertise from the beginning. He sold our 85 acres of land quickly and at a great price. Everything was very easy. And I was always in the loop about what was happening. Thanks Johnny. We are very happy!

Reece Family, 85 Acres

Indiana