Some Sunshine for Florida Citrus Growers in the Battle Against Citrus Greening

Earlier today the University of Florida’s Institute of Food and Agricultural Sciences (IFAS) announced that its researchers have developed genetically modified citrus trees that show enhanced resistance to citrus greening. These citrus trees may also have the potential to resist canker and black spot. IFAS noted that the commercial viability of these new citrus trees is several years away as additional steps are needed, including transferring the genes into additional commercial varieties and rootstocks that are commonly grown in Florida.

Many growers have lost their groves over the last decade to freezes, hurricanes, citrus canker, and most recently, citrus greening. Infected groves are either unprofitable or fallow and growers had difficulty justifying the costs of replanting in light of the ever growing citrus greening threat. If the new trees prove to be commercially viable, then growers can replant their groves with a greater degree of confidence.

Generally, the costs of planting a citrus grove are capitalized under §263A of the Internal Revenue Code. In certain cases however, replanting costs can be expensed if the original trees were lost or damaged “by reason of freezing temperatures, disease, drought, pests, or casualty.” There is no time limit as to when the replanting must occur. In those cases, the general rule of §263A does not apply to any costs of replanting bearing the same type of crop, whether on the same parts of land which damage occurred or any other land of the same acreage in the United States. However, the grower can reinvest among different varieties of the same crop (i.e. switch out oranges for grapefruit) and replant with higher density on the same amount of land.

There are significant planning opportunities for replanting under §263A. Not only can the grower take advantage of this opportunity, but new partners can as well, creating an incentive for investor money in replanting efforts so long as the grower maintains a greater than 50% equity interest in replanted property and the minority investors materially participate in the replanting, cultivating, maintaining, or developing of replacement plants. Recently, Florida’s delegation to Congress introduced HR 3957, the Emergency Citrus Disease Response Act, to expand the exception of §263A to new growers who acquired a grove from a grower who lost their grove due to disease.

Since it may be several years before a grower can replant their groves, we recommend that growers begin taking steps today to develop a plan to replant. Such measures would include adopting a written plan to replant along with building up reserves or readying their land for the trees. We will discuss developing plans for replanting and several options in a follow up post.

About the Author(s):

Brad Gould practices in the area of federal income, estate, and gift tax law and business succession planning. He represents businesses and business owners in all types of business and tax matters, including choice of entity, mergers and acquisitions, reorganizations, and other general business matters. Mr. Gould represents individuals, businesses and fiduciaries before the Internal Revenue Service and also counsels clients on estate and wealth preservation planning matters. Additionally, he represents trustees, personal representatives and family members in controversies regarding wills, trusts and estates. Mr. Gould is a Certified Public Accountant. He may be reached at (772) 464-7700 or
Michael D. Minton is a shareholder and chair of Dean Mead’s Agribusiness Industry Team. He represents family businesses with an emphasis on generationally-owned agricultural businesses. He assists with their organizational structure, federal income, estate and gift tax planning, and business succession planning. He is chair of the Harbor Branch Oceanographic Institute Foundation, a member of the Solutions Committee of the Central Florida Water Initiative and a past vice-chair of the Governing Board of the South Florida Water Management District. He may be reached at (772) 464-7700 or by email at
Dana M. Apfelbaum practices in the areas of federal income, estate, and gift tax law and family business succession planning. She counsels individuals in estate planning, with an emphasis on implementing the client’s objectives, asset protection and minimizing wealth transfer taxes. Ms. Apfelbaum also represents fiduciaries through all stages of probate, estate and trust administration. In addition, she represents businesses and business owners in all types of business and tax matters, including choice of entity, mergers and acquisitions, reorganizations, other general business matters, and succession planning. She may be reached at (772) 464-7700 or