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American Land Seller Podcast
Welcome to The American Land Seller, the podcast dedicated to landowners, buyers, and investors seeking expert insights into the evolving land market. Hosted by Koby Rickertsen, an Accredited Land Consultant and Multi-State Land Broker with High Point Land Company, this show dives deep into market trends, investment strategies, and real-world experiences in farm, ranch, and recreational land sales.
Each episode features industry professionals, seasoned investors, and landowners sharing their expertise on topics such as:
✅ Land market trends and valuation strategies
✅ 1031 exchanges and tax implications
✅ Seller financing and creative deal structures
✅ Conservation easements and government programs
✅ Navigating legal and zoning challenges
✅ Building generational wealth through land ownership
Whether you're a first-time land buyer, a seasoned investor, or a landowner looking to sell, The American Land Seller provides the knowledge and tools you need to succeed in today’s competitive land market.
American Land Seller Podcast
#35 - Cash in the Ground: Turning Dirt Into Deductions with Alec Bean & Karly Pavlinac
Beneath your boots lies an untapped tax advantage that could be worth hundreds of dollars per acre. In this eye-opening conversation with Alec Bean and Carly Pavlinek—known as the Soil Tax Guys—we uncover the powerful financial benefits of IRS Section 180, a little-discussed provision allowing substantial tax deductions based on soil fertility.
This isn't new legislation—it's been hiding in plain sight since the 1960s. Agricultural landowners can potentially claim deductions averaging $500 per acre (with some properties exceeding $2,500!) by conducting proper soil testing immediately after purchase but before applying any fertilizer. The process identifies excess nutrients compared to university standards, turning what most consider just dirt into a valuable tax asset.
The window for claiming this deduction is remarkably narrow, which explains why it remains underutilized despite its significant potential. As Alec explains from his agronomist perspective, "Once they apply fertilizer, we've had this happen where they forgot and applied fertilizer, and we're like, 'Okay, you missed the opportunity.'" The testing itself costs just $10/acre, with additional reporting fees only if the soil qualifies for meaningful deductions.
What's particularly fascinating is how strategic landowners are leveraging these deductions to fund additional acquisitions. One client has implemented a "wash, rinse, repeat" approach—buying farmland, claiming soil fertility deductions, using the tax savings toward another purchase, and starting again. For farmland sellers, proactive soil testing can become a powerful marketing advantage, demonstrating both soil health and potential tax benefits to prospective buyers.
Whether you're a landowner, investor, or agricultural professional, understanding this provision could dramatically impact your financial strategy. Ready to see if your soil could be worth more on your tax return than you ever imagined? The ground beneath your feet might just be your most overlooked asset.
For more info and to reach Alec and Karly: https://asmlabs.net/irs-180/
Today on the American Land Seller, our guest brings something to the table that most folks in the land world aren't talking about but should be.
Speaker 1:I'm joined by Alec Bean and Carly Pavlinek of ASM Labs, better known in some circles as the Soil Tax Guys. These two are on a mission to educate landowners, farmers and investors about the powerful tax advantages tied to something we walk on every day soil powerful tax advantages tied to something we walk on every day soil. Specifically, we're digging into IRS Section 180, a little-known part of the tax code that allows for deductions tied to soil tax fertility improvements. Alec brings years of agronomic experience to the conversation, and Carly's background in strategy and innovation helps tie it all together in a way that's easy to understand and even easier to apply if you own farmland. They're going to explain how proper soil testing, documentation and lab analysis can open the door for real financial benefits and share some stories of landowners who've already seen that impact. If you've never thought of soil as a tax asset, this episode might just change the way you look at the ground beneath your feet.
Speaker 2:Welcome to the American Land Seller Podcast with your host, coby Rickardson. Coby is an accredited land consultant and multi-state land broker with High Point Land Company. Join us each week as we explore all things land. We bring you fresh insights and expert guests on sales, marketing, regulations, economics and so much more. Visit wwwamericanlandsellercom and find us on one of your favorite podcast platforms.
Speaker 3:Okay, kobe and our special guests, let's get started. Okay, kobe, and our special guests.
Speaker 1:let's get started. Hey, we're back here on the American Land Seller Podcast and I think everyone I don't know like. This is just totally blows me away what we're going to talk about here today. I don't even know if I'm going to believe it's a real thing by the time we're done, but we'll see. Apparently, there's aliens and there's tax loopholes that nobody even really knows anything about we're going to learn about today. So I am joined by Carly Pavlinek and Alec Bean.
Speaker 3:Carly, did I get the name right? Yes, you did.
Speaker 1:Okay, these guys are with ASM Labs and they are the Soil Tax Guys. How are we doing today, alec and Carly?
Speaker 3:Doing good. Excited to be here.
Speaker 4:Good to be here. We appreciate the opportunity. It's going to be a fun conversation, especially a timely one, being right near tax time.
Speaker 1:Yeah, I think we've got a lot to cover. So I don't know that we're going to get to the UFOs or whatever they're called these days. But we can do is we can talk about how you guys became the soil tax guys. So can you just give me an idea of this witchcraft that you guys are working with here? You guys are working with here, and I'll let both of you guys just kind of talk about what you're up to and how you can help my clients.
Speaker 3:Yes, so it's section 180 of the tax code, so people listening might be familiar with 1031. So three small paragraphs in the tax code. That allows you to take a tax deduction on extra nutrients in your soil. So when you buy ag land anything used for crop, cattle, livestock we come in after closing and do a soil test and extra nutrients is a tax deduction. So on average $500 per acre tax deduction.
Speaker 1:Wow, $500 per acre, so that could be more and it could be deduction. Wow, $500 per acre on it, so that could be more and it could be less.
Speaker 4:Correct Some areas of the country have been very good. Some some have been less good but yeah, average has been 500 and our clients have been very happy.
Speaker 1:So yeah, I just I had a guy call me with a little shy of 1400 acre ranch in Arizona. So is that like? Is Arizona and Nebraska? You're talking different soils, different, different possibilities.
Speaker 4:Yeah, so every state has a land grant university and we use that as our guiding star, more or less. So I'm an agronomist, I'm a certified crop advisor with the American Society of Agronomy, so I cut my teeth in the soil testing world. Asm was, and still is, a soil testing company, so spent my career in the agricultural consulting space, and so we use the land grant university information to determine where the thresholds are for these soil tests. So every state again has their own school. Um, I think you did you. You mentioned new mexico. I um new mexico arizona, excuse me, yeah so.
Speaker 4:So arizona has the land grant school I believe it's arizona state and they say you need x amount of pounds of nutrients per acre to produce an optimal crop. And so when we come in and do the soil test using these university approved soil testing methods, we hope that your soil test levels are higher than what those optimal levels are, and that difference between your test and the optimal level is what we assign a value to and then the client then uses for a potential deduction.
Speaker 1:Okay, that's fun. So let's just go. Let's rewind back to the beginning, like, is this something that you've kind of just discovered and exploited? Or is this like because I haven't heard very many people talking about this- yeah, we hear that all the time.
Speaker 3:So it's been in the tax code since the 1960s, sure, but it hasn't become something that people are really starting to use.
Speaker 3:until the past, you know, 10 years, but we know accountants have done it since the nineties. So, um, it's just not talked about. Because it's such a small window of time where you can do it. It has to be, you know, around time of closing and then doing the soil test before the new owner applies fertilizer. So once they apply fertilizer, we we've had this happen where you know they forgot applied fertilizer and we're like, okay, you missed the opportunity, we can't go back in time. So it's kind of tricky with this tax code. You really need to know about it beforehand. And then when you're buying land, you know contact us to get it done.
Speaker 1:That's kind of. So. There are some pretty strict rules. So this is something that every single land professional ought to have their head wrapped around this in order to make sure that we're making these. You know, just basically warning people don't fertilize. You know, let's see if you qualify. How does that work? Do I just get them in touch with you guys?
Speaker 3:Yeah, that's the best way to do it, and then we'll answer any questions they have and get them set up with the soil test, and that's just. The main thing is getting the soil test done. Then, once we have that done, they can fertilize, do whatever they want.
Speaker 4:Yeah, and we kind of do this in a two-step process. So the first leg of this first step is to take a soil test.
Speaker 4:So, we have a soil test done. Then from there, once we have those results, I do a no obligation consultation, do an estimate on the value there and say, ok, client, you have X dollars per acre in value. Is that going to be worth your time? Is that worth your accountant's time, your time? And if they say yes, that's when we move forward the official report. So really it's a win-win. Um, if, if the value doesn't end up being worth their time, the worst thing that happens is they have a fresh soil test on a farm they just bought right, and this goes beyond just like testing for fertilizer, right, you're doing a full-blown and full blown.
Speaker 1:And we just had a producer on a couple of weeks ago that talked about, you know, like their every two acre and two acre grid or something that he's getting tested every single year. You know that he's got like a $60,000, you know built into his budget to make sure this happens. But it also, so my guess is you guys are using the data for other things other than just taxes correct?
Speaker 4:Yes, so on the back end being that we've been an agronomic consulting company since the 80s, that's part of the value you get with working with us is you get to, you know, you have your soil test, you get to hopefully take advantage of this piece of the tax code and then, moving forward, you can utilize our agronomic consultation services for you know your fertility recommendations and things of that nature my company high point is in a big footprint.
Speaker 1:You you can provide agronomic services throughout most of the United States.
Speaker 4:Yep, so to this point we've helped clients from New York to California and North Dakota to Texas, so we've been everywhere. If you're selling or buying land in the United States, we can help you out. That is very cool.
Speaker 1:So what kind of time frame are we thinking here? I'm thinking like a real estate agent and real estate broker. If I have, I get a contract together. Is it so you guys want to? We should just email you, along with the title company, that we got a deal, yeah, and have you, or have our clients reach out to you, yeah.
Speaker 3:It's best to have the conversations when you're under contract. Then you know they have time to digest it. Think about it, plan it, all that kind of stuff.
Speaker 1:Okay.
Speaker 3:Very cool.
Speaker 1:So what else, guys? What am I? I mean, there's so much to this.
Speaker 3:Yeah, it's a it's a great tool to use as you start to think of investment in properties. Like you know, let's say, you make quite a bit of money every year. You know buying some land and getting this tax deduction can be part of your strategy.
Speaker 4:So we've had a couple of clients Alec, you can talk more about the one client that, yeah, you go ahead and talk about it, yeah. So I've got a gentleman that's buying a significant portion of land and he's been successful in other areas of business, but he is a farmer at heart. He has been a farmer his whole life is he is a farmer at heart and he's been a farmer his whole life. And so what he's doing is he's using these tax the, the, the dollars he saves in taxes he rolls into more land purchases. So it's kind of this wash rinse repeat cycle where he he buys a farm, he takes advantage of these tax deductions, he buys another farm with that cash or, you know, helps with the next to bankroll the next purchase. So it's an incredible strategy and taking advantage of all the pieces of depreciation and deductions that you can. That's just a smart business move.
Speaker 1:So if you're, what's the rule on? If you, um, how long do I have to uh, uh, hold on to the property once I've got my tax deduction?
Speaker 4:so there's really no rule on how long you have to hold on to it. It it really becomes more of an economics question, uh, because this will affect your basis in the property. So when you do go to sell that property, there is going to be a clawback in the form of right, in the form of tax. Uh, the, the government is going to want, uh, what, what you've been keeping from them. Now, the. The perfect scenario is a 1031 situation. So you buy a farm, you take this deduction, you roll that value into a 1031 on another property, and so you continue again. Part of this whole farmland strategy is deferring taxes, and so if you're a 1031 buyer, and so if you're a 1031 buyer, if you're a buy and dire, as I like to call them, this is an excellent strategy. So we certainly don't want to steer anyone away, but the person that is maybe flipping land quickly, it may not make as much sense for. But we can have a conversation about your strategy and see how this can fit into it.
Speaker 1:Yeah, because my thought is, with a 1031 exchange, you have to hold on to it for a little bit. You can't just flip land doing that either, but definitely for an investor that's going to come in and hold it for five, eight years, something like that. This is a great plan to do that. Guys, if you don't mind, let's take a quick break and we will be right back. The american land seller podcast is brought to you in part by landhubcom. Join us today and experience the expertise of LandHub's land marketing professionals. Whether you're buying or selling, let us show you the way in the ever-evolving world of land transactions. Visit LandHubcom and discover what the future of land marketing looks like. Landhubcom where your land journey begins. All right, we're back with Carly and Alec from ASM Labs. They are the soil test. No soil tax people, right?
Speaker 3:Yep soil tax guys.
Speaker 1:Soil, the soil tax. Guys, I'll get that by the end of this, I'm sure. So, not everybody's probably going to qualify for this. You know, like immediately, if I was listening to this, I would probably be like super excited and call my accountant and try and get the setup. Uh, but this really does has to do with, like it's a three-year window and you can't have fertilized before you, um, after you purchase the purchase the ground, before you take a soil test, right after you purchase the ground, before you take a soil test, right? So, alec, can you just let us know who's going to qualify for this?
Speaker 4:Who's this going to benefit? Yeah, so how the code is written talks about those engaged in the business of farming and on land that is in the pursuit of an agricultural activity, that is in the pursuit of an agricultural activity, and the accountants and people that have kind of set up the guidelines for how this works. They kind of have a litmus test on how this works and how people can qualify. So, in order to take this, we need to establish the beneficial ownership of the fertilizer. What does that mean? Who owns this fertility that's in the ground? So it's very hard to argue that someone that buys the land doesn't also own the fertility in the land, right? The next step is we need to establish the presence and extent of the fertilizer. That's, when we come in and do the soil test, we are measuring how much soil fertility is out on this property.
Speaker 4:Next, the next piece is the basis to measure the fertility in the land. So what are we? What are we comparing this the your soil test and what are we comparing your soil test to, right? So we say, all right, we have your soil test and we're going to compare them to the land grant university in your state. And then, finally, the fourth point is the period of exhaustion. How long will these soil nutrients, these excess soil nutrients, last you in growing crops? This is very much similar to the depreciation world, where we depreciate different items, say in a building or a fence or a tile for different amounts of time, or a fence or a tile for different amounts of time. Part of our report does show how long these nutrients will last you in a normal cropping environment.
Speaker 3:So someone engaged in the business of farming and if you can hit all four of material participation, that the owner has to participate in some type of way with ag. So we get this question a lot. What is participation? And obviously that could be farming, it, it could be cash, rent, it could be mending fences, buying something, making decisions. All those types of things are participation in the farm and ag. So that's another portion of this tax code.
Speaker 1:So collecting rent technically is a portion of? Is that what you're saying? And just to clarify.
Speaker 4:A lot of accountants look at rent and then management of the farm through that collection of the rent as a participation. Again, we do want to make sure we say that we always defer to the accountant Right. We are not accountants, but that has been our overall experience. Is that there's some level here that most accounts are willing to go for, or crop share Crop share too, yeah, crop share.
Speaker 1:Crop share is great yeah. Sure, no, that's probably a great point because you know you definitely have to make sure that the person, whoever the person's accountant is because they're probably not going to go to a new accountant just for one tax code you know section. So what happens? We talked, hey, we want to maybe check, to do a soil test, so we have that available as an asset to our buyers yeah, we have a lot of brokers, or it's becoming more and more of a conversation with the brokers.
Speaker 4:They're telling their sellers hey, you know that not only from the agronomic perspective would this soil test be valuable to a potential buyer, but also from this potential deduction. Um, it, it's it. It's a nice little cherry on the top for a buyer when they can come in. Part of the marketing material is a soil test and if they're savvy to this piece of the code, they can utilize our services to kind of get an idea of what may be out there. And, of course, when they make the transaction they can actually take advantage of that. So we do have a lot more people brokers starting to use soil tests as part of their marketing regimen.
Speaker 1:That's. I mean. That's smart, because then you at least have an idea. I guess another question I would have is is since this is becoming more and more popular, is there any reporting data where you can call you guys and say, hey, we have seen like this in your area, or is that not something that we're to yet?
Speaker 3:Somewhat. So I'll give an example. So we did a property in Colorado and it came in there two different tracks, you know, same area, owned by the same person, you know, probably taken care of in the same type of way, since it was owned by one person and then sold to two different people around 2,500 something per acre tax deduction and one was 1,050 per acre tax deduction. And that was wild for us to see that difference. I mean both great tax deductions, but to be in the same property, that was surprising to us. So it really just depends on how well it was taken care of and what was spread on there before.
Speaker 1:Yeah, that's kind of insane too, if you think. I mean, like you're saying, it's an average of $500 an acre is what you're seeing as, but they. But it can get, I guess, pretty, pretty valuable.
Speaker 4:Yeah, we've had plenty, we have plenty over a thousand dollars an acre. We've done plenty of reports like that. You know we just want to much like the brokerage world an acre. We've done plenty of reports like that. Much like the brokerage world. You guys want to manage your seller expectations right. So we want to manage our buyer expectations as well.
Speaker 1:Ride that fine line of I want to be valuable to the client but I don't want to oversell it to the point where I get a bad reputation.
Speaker 3:Yeah, that's fair, that's fair.
Speaker 1:Okay, so let's talk about your testing. What does testing involve? Like, if I, if my, if I get my seller to say, call you guys and say, hey, um, we're going to test this to see what the value is so that we can advertise this, to test this to see what the value is so that we can advertise this, um, what, um, what are you guys lead times? How long does it take?
Speaker 4:you know that kind of stuff, yeah so we charge ten dollars per acre for soil testing and that is going to be a full, a full soil test.
Speaker 4:Again, that does include all of the back end agronomic consultation as well. So it's kind of packaged up nicely there for a client, but we always defer to what the land-grant university in that person's state is wanting to see for soil testing. There's there's lots of different soil testing methods. Uh, so different, uh, actual, different, actual in the lab, different methods of testing the soil. So every university kind of has a different approach to how that's done. So we make sure to follow those guidelines. And then, as well as the question always comes up well, how many samples do I need? That is going to vary a little bit per state as well. Do I need? That is going to vary a little bit per state as well. Most states have kind of a standard you need one sample per two and a half to 10 acres or something like that. One sample needs to represent two and a half to 10 acres. So again, we always defer to what the university is looking for in that sense and we feel that that helps mitigate our clients' risk because we're following the rules.
Speaker 3:Yeah, that makes sense, but so timing-wise how much notice do we need to give you?
Speaker 4:So we typically assuming the weather is good and all goes well, we can usually get this turned around in roughly two weeks. If the ground is frozen when the property changes hands, which happens in my area of the world, in your area of the world, kobe, we may have a little bit longer of a lead time there, but typically two weeks is what we can expect. Right now we're under the gun with tax season and occasionally we have clients say, hey, can you get this done? And we are scrambling.
Speaker 1:Does it still affect this tax date, April 15th, then this year?
Speaker 4:Yeah, we have a number of clients that purchase farms. Well, all throughout last year, of course, but you know, in the land business as you know, I would actually love to know. Maybe you know Kobe know I, I would actually love to know.
Speaker 1:Maybe you know kobe the uh percentage percentage of land that transacts in the last quarter of the year. Oh, you mean like on a percentage wise?
Speaker 4:yeah yeah, 40, 40 to 45 yeah, so we have a number of farms that are we're working on that transacted in December 31st for all intents and purposes, and it was frozen and we're working on getting those out now.
Speaker 3:Yeah, Quick turnaround time. With that. We're like is it un-frozen yet? We're like checking the weather, trying to figure out if we can get there. So that makes it hard.
Speaker 3:I suppose, yeah, yeah, you probably do a little running around here in the spring, oh, yeah, especially with um transactions that just happen around this time frame because, like we said, I have to do the soil test before they apply fertilizer. So we had a client last week that was like, okay, just went on, closed on the property and we're going to fertilize in a week, so can you be there on Tuesday? We're going to fertilize on Wednesday and we're like, oh my gosh, it's like four days from now. Yeah, and we got it done. But you know it's that time of year where everyone's applying fertilizer. So if you're closing around this time, you know you want to make sure you get that done yeah.
Speaker 1:Well, no, like I said, I think it goes back to it's like one of those planning deals, where it needs to be, in our prep and our pitch bucks, and to let people know that, hey, this is, this is something that's out there and let's let's you know it's going to cost you this X amount of dollars, it's going to cost you this X amount of dollars, it's going to cost you $10 an acre to find out, but it makes your land immediately worth this much more.
Speaker 3:Yeah, and then we didn't talk about the investment for the reporting. So it's $10 an acre for the soil test and $30 an acre for the official reporting, so $40 altogether.
Speaker 1:Right, but you're going to do the test and then decide whether or not, you need to go forward.
Speaker 3:Correct.
Speaker 1:Correct Right Now. That makes total sense. All right guys. Well, if you don't mind, we're going to take a break and we're going to come back and do one more segment if you've got time. Sounds great, perfect.
Speaker 5:We will be right back. Land isn't just dirt. It's where memories are made, families are raised and livelihoods are built. But when it comes time to sell or buy, the weight of the decision is heavy. Where do you even start? Who can you trust to guide you? For too long, land transactions have been treated like a simple exchange Numbers on a paper, a signature on a line. But it's more than that. At High Point Land Company, we don't just list land, we walk it. We learn its story and we find the right buyer who understands its worth. You are not just another deal, you are the steward of something bigger and we're here to help you navigate every step of the way when it's time to sell, when it's time to buy. We're here Because land is more than just land. It's your legacy.
Speaker 1:All right, we're back here with Alec and Carly, the Soil Tax Guys.
Speaker 3:Does that offend you at all, Carly, that you're a guy.
Speaker 1:You can say Soil Tax Gal whenever it's me. Okay, it's the Soil Tax Guys and Gal.
Speaker 3:It doesn't offend me um it's a great name.
Speaker 4:It's funny how it came up too. Oh yeah yeah. No one can remember asm and carly started finding out that people were saving her name in their phones. As what? The soil tax guy? The soil tax gal.
Speaker 3:Oh, really yeah, and so that's how the name came about.
Speaker 1:Well, I'm saving you, carly, as the soil tax guy in my phone, so I don't want to get in trouble for what you want to gender yourself as All right, so going back to this process. All right, so going back to this process, I'm just like. My mind immediately goes to how this becomes valuable to my sellers. Right, and especially you know we were talking during the break there is areas of the country where we've seen a significant gut punch as far as prices go, punch as far as prices go, especially in those prices where you've got we like to call it the black gold, you know, the really really good soil with no irrigation, stuff like that. That fluctuates a little bit, probably more than the part my stuff will go up, but then it holds fairly well, like we saw where some guys saw like a 10 or 12% correction last year.
Speaker 1:In some other parts of the country we saw like less than a 2%, and we'll probably see two, three, four years of a 1% to 3% down and then we'll have a pretty big gain once we get commodity prices back where we need them to be and honestly I think that say whatever you want to about this administration I think commodity prices are probably going to rally in the next 18 to 20 months anyway, so I think we'll be okay, even with the tariff talks and all that. So how quickly can I use this as far as, like, if I'm telling my seller, let's go get this test done so that we have this little bargaining chip right for when we're still on our land, we could potentially make this thing worth instantly $500 an acre more, right, I mean, that's what you're saying.
Speaker 4:There's the potential there, yeah, so, as far as from a mechanical standpoint, when a buyer purchases the land, their accountant is generally going to want to take this deduction, uh, in the year that it was incurred. Uh, we were talking earlier about why we've been running around so much this spring. Well, for those, those people that uh purchased in in Q4 of 2024, uh, they're trying to take advantage of this on their 2024 taxes. So so there's there's. So there's that piece of it.
Speaker 4:Some accountants do opt to spread this out over three years. So they'll say, okay, maybe we don't need this full deduction amount or whatever. Again, we don't know everybody's tax situation, of course, their accountants would infinitely better. And so the accountant might say, hey, let's actually spread this out over a three-year time frame, and most of the time how that looks is taking 60% the first year, 30% the second year, and then that final 10% the last year, the third year, so kind of spreads it out. If you're expecting decent incomes for the next couple of years, it may make sense to try to spread it out. If you're not expecting decent incomes, you may try to twist your accountant's arm to get it all in one year. It's hard to say. Like you mentioned, crop prices are quite low right now and the next couple of years may be a little bit of a tough road, so packing in these deductions now may end up making more sense.
Speaker 1:Yeah, I think they interest. Like I told you earlier, I had a producer on earlier that was talking about running negative with soybeans right now and very, very small margin of profit on corn, and that's because he has some pretty good contracts. So you know, like definitely that's one of the things to consider too is, if you're a producer and you're probably going to have some losses, this is maybe not going to help you very much because it's a tax break, right Could be.
Speaker 4:And you meant Go ahead, sorry. I thought immediately of your question about how do you make this valuable to your sellers, right? So if we're going into a situation where land prices may be down slightly, you mentioned a gut punch, and so land prices may be down. Land may not be flying off the shelves like it was None of us know, we can't crystal ball here but this is valuable to the seller because they're taking the initiative to well, a take a soil test and show that their land has been taken care of from an agronomic perspective.
Speaker 4:So that's valuable in itself to a buyer. I don't know about your area of the world, but it's rare for me to see a farmland marketing material with a soil test on it. It's somewhat rare and I think that would set the seller and you as, by extension, the broker, apart from the competition by just having a soil test first off, and then the second piece is having that idea of okay, we know that this farm is in good shape and we can probably estimate that there's some per acre value there that the buyer could take advantage of. Again, it's only available to the buyer, but if the seller is savvy to the situation, they may say okay, we want to help the buyer take advantage of that.
Speaker 1:Well, that's smart, because I mean and again, like I just keep trying to wrap my head around how does that work for everybody? And you know, like, if you're going to have I go back to this I always think of this as money, but sometimes it's not real money, right it's you may not gain anything if you don't have any. You know, if you're in negative taxes and you're not going to have any tax liability which, again, talking about, farmers are pretty good about not having much tax liability most days but still I think that, like you said, I think that I can say I have a classification of soil, but I don't ever I mean to your point, I don't ever have a soil test that's run for a.
Speaker 4:so that's an interesting idea too, right recently, where you know we give an estimate to a farmland buyer and their accountant says well, you have more deductions than you need, or you know you're not making any money, and so there is always the possibility of deferring those losses and we're not accountants, but that is one of the situations that we've run into that account say, okay, we'll, we'll defer. You know they may take this soil fertility deduction but defer a different deduction.
Speaker 1:Gotcha, you've seen that yeah so we don't maybe have to, you know because you can. There's all kinds of there's ways. I it's got my brain spinning so I'm trying to. There's lots of, lots of different things you can do. That's, that's really really cool.
Speaker 3:I just remember this one guy saying you know on Alec what you're talking about deferring other things. This is the one tax deduction where you know if you don't use it, you lose it. And I remember when he said it like that, I was like, I mean, that's true, you know, you have to take this in such a small window of time. It's better to defer other things, so that way you can, you know, use this type of tax deduction.
Speaker 1:Well, and to circle back to what you were talking about with the accountant's difference between wanting to use it all in one year, I mean like my guess is because they met the government right. So you just never know when somebody might make this their hill to die on, for whatever it is you know and so yeah, so it might be the smart way to do it. It's like let's just take this today, because we have it today. So, yeah.
Speaker 1:Let's just dig into a little bit of okay, like I think we've kind of geared everything towards basically, like, row crop agriculture throughout this entire interview. We were talking during the break pastures, ranches, whatever you know like, whatever you want to call them. It has to be a pretty big chunk of land for us in Nebraska to call it a ranch. You go to Colorado 50 acres qualifies. So I don't you know like, depends on who's marketing it. But it occurred to me like, realistically, there's a lot of people that have bought ranches over the last couple of years that haven't fertilized it. Probably, I mean unless you're counting't fertilized it. Probably, I mean unless you're counting the cows on it. Maybe that does that count. If I got cows running around and fertilized dollars.
Speaker 4:it's all about dollars spent Okay.
Speaker 1:Well, they're expensive yeah.
Speaker 4:Right now. Yeah, I'd love to love to be a cattle rancher right now, Goodness. Yeah, some of our best scenarios have been in the pasture environment. One that comes to mind was a pretty large ranch in one of the western states and the value came back at like $2,500 an acre. And like the value came back at like $2,500 an acre and the gentleman deferred quite a large amount of tax there. And so pasture is great, it is an agricultural. Again we come back to it's an agricultural activity. You are growing food for your animals to graze on in a pasture. So some of our best results actually have come from pasture. And it's funny, it's kind of counterintuitive, because I have people ask all the time well, this probably won't work on pasture. Again, some of our best results have come from pasture.
Speaker 1:That's pretty fascinating because it's like I'm always looking for a reason to become, to create a value for myself and what I do. And so, even that, if I can go search my clients you know that have or my not even my clients but my competitions clients you know that have uh, hopefully they're not listening to this but, um, call those guys up and say, hey, you know, did you think about this? Have you considered this? And so that's extremely, extremely smart. So, yeah, I just heard of a friend of mine I don't know if they're using you guys or somebody else, but it's a similar project where they're using the soil tax credit to, or soil tax exemption, whatever you want to call it to.
Speaker 1:He turned a two-deal thing into a five-deal thing using this, because there were people hanging out with some money, didn't know what to invest in, couldn't figure, you know like there was only about a 4.5%, 5% return if they were to invest in the land, whereas they thought they could go throw their money into the stock market and do better. And then they were able to bring this and get this instant tax credit. And so you know, and so, again, I see the value in it. It's just a matter of getting our clients to you guys to figure out and trusting you guys to make sure you're taking care of them. I think that's the big thing and so not just run a bunch of tests and then well, it didn't work. So that's why I like that 10 and 30 deal. It may cost 40 in the long run, but it only costs that much if the soil qualifies Exactly Yep.
Speaker 1:What did we not think of while we were doing this episode, guys? I mean geez, I think I have a very simple amount of questions, you guys probably could ask each other questions for five minutes.
Speaker 4:Right questions for five minutes, right? Well, I think you know stepping a little bit outside of the soil fertility world. There I mentioned earlier everything that's kind of available to someone for deductions or depreciation. So if you're familiar with the commercial real estate world, if you're familiar with the commercial real estate world commercial property buyers they often have a company come in that does cost segregation studies and that company will do a study on the building that they purchased and assign values to everything in the property and they can really juice their returns on that commercial property.
Speaker 4:So this is something very similar and we are actively working towards serving other areas outside of the fertility piece of this. We believe that, while the soil fertility is an extremely valuable leg of what we're doing, extremely, an extremely valuable leg of of what we're doing, we believe what we have coming down down the line here is uh is going to benefit clients, uh, even in an even greater way. So keep an eye out for that. There's, there's so many things that clients should be taking advantage of when it comes to uh, farmland appreciation that is uh, that I mean that.
Speaker 1:I mean it's just, we just like just a couple of weeks ago we went to the land conference and like just from everything from data centers to battery storage for power, to like all this stuff, like what was it Somebody presented at the um? Let's make a deal that there you have a buyer looking for 100,000 acres of you know like mediocre to you know not great farmland, pasture land that they can repopulate. You know like, reforest it, you know, for a carbon credit. I mean it's just, we have gone from it's worth X amount of money because it's you know it grows corn to it's worth X amount of money. And then some you know it's worth this much because it grows corn. And then you know, if you work with Walmart, you get a carbon credit if you do these amount of things too. Now you can if you don't fertilize and before you fertilize, you can get a tax credit.
Speaker 1:Just crazy amount of things that we got to pay attention to. So I appreciate the fact that you guys brought this to my attention. Carly, it was awesome to meet you, and down in Arizona I think that's where we were, yeah, so I appreciate you guys sponsoring that too. That was a big thing for our organization. I think you met a lot of great people.
Speaker 1:It's really hard to hate those people when you go home and have to duke it out with them. We just had a podcast on education, land education and stuff, and it was people that I compete against once in a while were on the podcast and it was like at least I'd like to lose to them and not somebody that doesn't know anything you know like, so, but well, guys, I appreciate the time and the information. And how do we get ahold of you folks, if you guys excuse me, you guys? Can we get ahold of you folks If you guys excuse me, you guys? We get a hold of you if we need you. Where's your? What's your back?
Speaker 3:You can just send us an email. So send me an email, carly K a R L Y at a S M labsnet. Or text nine eight four, three, four, four, six, one six. Or text 984-344-6169.
Speaker 1:Perfect, and that'll get the ball rolling.
Speaker 3:Yeah.
Speaker 1:All right, and with your permission, I'll put your website and your contact information in the show notes for all the platforms that we're on, so that way people can find you if they need you.
Speaker 5:Sounds good.
Speaker 1:Definitely saving you in my phone under the tax, whatever soil tax guys.
Speaker 4:Sounds like a plan.
Speaker 1:All right guys have a great rest of your day and we will see you all down the road.
Speaker 2:As we wrap up another episode of the American Land Seller Podcast. Thank you for joining us. Visit wwwamericanlandsellercom and find us on one of your favorite podcast platforms. If you would be so kind and you enjoyed today's insights, please like, subscribe, rate, follow and review us on whatever app you are listening or watching on. Connect with us on social media for updates. Until next week, kobe wishes you success in your land endeavors. God bless you and have a great week. The American.
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