We've been hearing questions from North Carolina farmers about the "residual fertility" deduction, which may let buyers of farmland deduct the value of unused fertilizer that came with the land. There is little official IRS guidance on this deduction, and some of the claims being promoted go beyond what the law appears to support, so it's important to understand the requirements and risks before taking it. The article below comes from the Center for Agricultural Law and Taxation at the Iowa State University, but it covers federal tax law that applies equally to farmers here in North Carolina.

Iowa State University - Considering the Residual Fertility Deduction