What are conservation expenses on Schedule F?

Conservation expenses are usually expenses paid to conserve soil and water for land used in farming, to prevent erosion of land used for farming, or for endangered species recovery.

Some examples of conservation expenses are:

• The treatment or movement of earth, such as leveling, grading, conditioning, terracing, contour furrowing, and the restoration of soil fertility
• The construction, control, and protection of diversion channels, drainage ditches, irrigation ditches, earthen dams, watercourses, outlets, and ponds
• The eradication of brush
• The planting of windbreaks

Conservation expenses can only be deducted if they are consistent with a conservation plan approved by the Natural Resources Conservation Service of the Department of Agriculture or a recovery plan approved in accordance with the Endangered Species Act of 1973 for your area.

Your deduction can't exceed 25% of your gross income from farming (excluding certain asset gains). However, you can carry the excess forward to future tax years.