Last week, Legacy Nutrient Tax Deductions (LNTD) were discussed and this is a follow up. This is a 1960’s tax deduction for oil, gas, mining, agriculture, and even timber production. It allows farmers to deduct the “excess value” of soil nutrients as a depreciating asset. For 60 years this deduction was ignored but now the IRS has finally come up with tax rules for this deduction. This article will explore how some farmers using this deduction. Consult with your attorney and CPA whether you want to pursue this deduction. Here are some common problems farmers have had with this tax deduction. First, many were taking deductions too quickly or excessively. Improper sampling (mixed depths, inconsistent grids) are an issue. It is easy to double count current owner tenant inputs. Bad baselines will inflate “excess” nutrient values. Thin documentation, i.e. can’t satisfy PLR MSSP guidance for tax purposes. The biggest problem most farmers who are looking into this deduction was how to documen...