There is some nice ground that exchanges hands, though, and there's a lot of value there built up in excess nutrients.

Yeah, there are.

And as nutrient values continue to get more and more expensive – The value of what we deal with at BOA and putting together that comprehensive value really does have such a very big benefit or another tool that our farming community can utilize.

Just like a tile irrigation system or a pivot or a fence line system can be used as a depreciation on the basis, so can these extremely valuable nutrients that are above that baseline level.

As these prices are high on fertilizer, are you seeing your average, I don't know how you would put that, savings to the farmer just going up and up?

They are.

They are.

Essentially, they go hand in hand with that overall value of what those nutrients are at the time that the property is acquired.

I, I guess I'm just kinda curious about that.

Sure.

So, you know, always have to confer with your CPA or accountant to make sure that the transaction of properties is done in the correct way.

But essentially, the understanding of this deduction is based upon a step-up in basis, and we see a step-up in basis occur when either we purchase or we inherit property.

And the understanding on the inheritance side of this is, you know, the mom or dad may have paid X amount of dollars per acre per property, and as they pass away and we inherit it, the value of that property is increased.

And instead of having to pay capital gains if we were to sell the property, it gets a, a step-up in basis.

And when that step-up in basis occurs, the inheritors have the ability to use this depreciation again, 'cause the excess nutrient deduction or the legacy nutrient deduction is, is based upon any time that a basis transfer happens, these depreciations can be taken.

So how, how do you determine what's excess and, and how do people get started with that?

And just real quick, just talk about how do micronutrients impact that value of fertility in the soil and what a farmer could potentially deduct right off income tax?

Yep, absolutely.

Pleasure to be here as always, gentlemen.

That was a great conversation listening in on that.

And there's no question that micro and macronutrients come into play when it comes with an understanding of a tax deduction based upon these subset values of excess nutrients.

So at BOA, we're doing an analysis to give a good report on the value of those excess nutrients when we acquire a piece of property.

So at either purchasing or an inheritance of a piece of agricultural property, we're going to put into a report an understanding of what the value of those macro and micronutrients are.

And good luck to you here through this fall.

Can you talk a little bit about how this works with soils in general and the value of nutrients out there and how a farmer can really benefit from that?

Absolutely.

Pleasure to be here as always.

One of the things that we purchase when we purchase a piece of property comes down to the understanding that there's an amount of fertility.

And in that fertility, there is a subset value of nutrients that's known as excess.

And essentially the IRS allows us to take the value of these excess or nutrients that are above one year's plant supply to be utilized as a depreciation on the basis of the property, and in turn as a deduction for income taxes.

And that's essentially what we specialize at at Boa Safra Ag.

So how do you make the calculations for what is in the soil and what the value of that is?

So, Nicholas, can you explain it just a little bit? And then I don't know if manure enters into anything at all other than, hey, we built the ground, so you might have more valuable land than But just explain a little bit the legacy nutrient deduction and then just talk a little about that fertility or manure component.

Yeah, absolutely.

Always happy to be here with you folks.

And as we've discussed, we as well are not tax advisors.

We're not CPAs.

We perform a complete third-party service for the correct methodology on the soil sampling as well as the methodology on the reporting.

And essentially what we're dealing with is when we purchase or inherit property, one of the things we're purchasing or inheriting are these subset values of nutrients that are known as excess or legacy nutrients.

So, Nicholas, if somebody wants to get in touch with you or take a look at what your company is doing, where can they go to find that information?

And, Nicholas, so when we're taking a look at nutrient values in the soil, boron is one of the things that does get looked at, but it's a micronutrient, so not a big deal, but it's one of the things you factor in there when you're figuring some of these nutrient values that a farmer may look at for his land that he's purchased, correct?

Absolutely.

Gentlemen, pleasure to be here, as always.

This conversation is a really fun one to get into with folks because you're 100% correct.

And we do have it in our analysis.

It is one of the 11 macro and micronutrients in this occurrence.

It's of course the micro that we do an analysis on.

What process do you go through to get these legacy nutrient deductions?

Yeah, and while I can complain a little bit about our fertilizer bill this year on the farm, it's probably never been a better time to work on legacy nutrient deductions for your farm with these high fertility values.

Yeah, it's pretty impressive.

We're seeing some excess nutrient numbers that are above $2,000 an acre on averages right now just because of those costs.

So when we're thinking about that, you know, if we're looking at a partial property being sold for between $4,000 and $5,000 an acre, you can immediately take off 50% just based on an understanding of the excess nutrient load.

So, yeah, it's an extraordinarily useful tool right now in particular.

You know, one thing, too, Nicholas, that we get a lot of questions about is how many years do you spread that deduction out? Do you do it all the first year? Do you spread it out over three years or something like that? What do you find a lot of growers doing?

Yep.

So, you know, what we see is that there are actually three main tax codes that allow a taxpayer to utilize this deduction.

It ultimately does make a big difference in the value of the land though.

Oh, absolutely.

Yeah.

That was fun listening to that.

And, and, and no question that's, What we deal with at Boas Opera is an understanding of these levels of nutrients in the soil.

And essentially there are three types of nutrient levels.

There's natural occurring nutrients, nutrients that are there just through mother nature.

Talk to us just real quickly about what your service does and how you work with growers around that extra fertility value.

If we've got some tax benefits while we're buying that ground, it certainly helps.

It does.

It does.

And you know, when we look at, at what kinds of properties qualify out there, row crop, pasture grazing, grassland, any ag really qualifies.

And it's a big deal when we buy these pieces of property.

And what we're purchasing is we're purchasing their type of fertility.

And there's a subset value in nutrients in the soil that is an understanding of an excess load.

Is it different when it comes to pastures or is it still the same process?