We deliver the most data-backed, comprehensive, reports available on the market.
The process includes three steps:
Step 1: Sampling Soils
Boa Safra performs agricultural soil analysis by collecting soil samples across multiple depth profiles to determine the legacy volume of nutrients at the time of purchase. These comprehensive soil testing services are designed to be multi-purpose for owners, enabling owners to capture the soil deductions and tax benefits while also enabling them to make better farming decisions in line with their established sampling practices. These samples test for macro and micronutrients amongst a myriad of other soil characteristics as well. While some landowners may engage Boa Safra to simply provide these soil testing services, most use this as the starting point for tax benefit and deduction analysis.
Our soil testing services start by taking samples at two depths to test nutrient levels. The purpose of the first set of samples is to establish what volume of nutrients exists in the shallow, plant-available zone. The second set of samples is taken at a deeper depth, to provide a comparison point for the shallow samples. There are fewer nutrients in fewer tons of soil. Accordingly, the shallow samples show smaller amounts of nutrients than the deeper samples do. The shallow samples are used for calculating the volume of material for purposes of deduction, while the deeper samples provide a dataset that can be used to defend against any challenges to the deduction.
For properties purchased in the past, the company runs its proprietary algorithms to hindcast what the legacy volume of nutrients was at the time of purchase based on more recent soil tests and crop production and fertilizer application information.
Step 2: Establishing Nutrient Values
Once the legacy nutrient volumes are determined, Boa Safra’s agricultural soil analysis draws from its historical databases of nutrient pricing information to determine the value of nutrients at the time of acquisition. These datasets draw from publicly available sources that account for price variances across time and geography and are included in the final report.
Step 3: Generating Comprehensive Reports
Once the volumes and values of nutrients are established, the company compiles robust reports. These reports range from dozens to hundreds of pages depending on the size of acreage and complexity of ownership structure, enabling clients and CPAs to take advantage of soil-based tax benefits and file returns with peace of mind.
Only qualifying farmland transactions are permitted to claim pre-existing Soil Fertility Load as a deduction for agricultural production. The following outlines common situations allowed or not allowed.
Acquired after 12-31-1958
Purchased, exchanged, or inherited
Land use — such as crop production, pasture grazing, or other — must utilize existing soil nutrient fertility
Land received as a gift
Land enrolled in certain government conservation programs, including the Conservation Reserve Program (CRP)
Residual Fertility Load valuation may be determined as part of a land purchase agreement or appraised by a qualified third party.
- Residual Fertility Load value may be allocated in the purchase agreement
- Agreement of the prior landowner is required
- The value of pre-existing soil fertility is rarely included in purchase agreements
- Utilized in the absence of an allocation in a purchase agreement
- Should be a qualified, third-party expert providing a written report as support for an allocation of the purchase price and any resulting income tax deduction
DISCLOSURE: The content represented on this website is for informational purposes only. Boa Safra Ag makes no representations regarding the income tax implications or other use of Soil Fertility Load Analysis information and does not provide legal or accounting advice. Consultation with a tax and/or financial advisor is required.
Boa Safra Ag was founded by a team of Midwestern ag professionals to assist landowners in evaluating the presence and value of farmland soil fertility. Leveraging our extensive agricultural expertise, we help landowners maximize the value of an IRS section 180 deduction related to recently acquired farmland.
Our world class team of agronomists uses advanced technology and partners with industry-leading soil sampling and analysis organizations.
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