Alpacas as an Investment

You may have heard that Alpacas make a great investment because of their high annual yields of fiber and the lucrative income it can provide. But did you also know that the tax code makes offers huge benefits to Alpaca owners?

Whether you’re an individual with the ability to raise an Alpaca for fiber on a small farm or breed alpacas to shear or sell on a larger area of land, the tax code is full of deductions that will make investing in alpacas even more profitable than many other forms of investment.

Section 179 of the tax code allows for taxpayers to begin claiming deductions for some capital assets, the things purchased as investments toward profits, as soon as they are purchased. Alpacas are among the limited number of purchased investments that are included in this section. These are benefits that you will not be eligible to receive if you put money toward a traditional investment opportunity, like buying stock or a CD.

If you own an Alpaca for over a year, it is subject to capital gains tax, like most other investments. Capital gains are profits from an investment that has been resold. Your initial livestock will be subject to this provision if you sell them, as will any offspring from your livestock.

At the end of the day, Alpacas are a form of investment that offer significant and unique tax deductions that will start benefiting you as an investor right away. As long as you keep them, you won’t need to pay capital gains taxes, so Alpacas an be a great long-term investment opportunity. Or, if you choose to sell them, take the profit and pay the capital gains taxes on the sale, you still come out ahead—you will have accumulated enough tax benefits between the time of purchase and the sale to compensate for paying livestock capital gains taxes on your Alpacas.

Important Update for the 2012 Tax Year

February 8th, 2012 - The "Tax Relief Act of 2010" and the "Jobs Act of 2010" had a substantial positive impact on Section 179 for the 2012 Tax Year - below is quoted from "section179.org":

Capital gains can be available on the sale of breeding animals and their offspring. Current expenses are deductible.

Consult a tax advisor for specifics as they relate to you.

Add to all of this that alpacas are 100% insurable. Can stocks do all of this?

All You Need Is Love  Alpacas are easy to raise- they eat very little and therefore require only a small amount of acreage per animal. Veterinary costs are minimal. Besides their endearing qualities of warmth, friendliness, and train ability, they have an enduring quality of strength and toughness. That means you’ll have a friend for a long time to come. Coming from the rugged Andes makes life on the farm a piece of cake... for your alpaca and for you!

The Many Benefits Of Breeding  As your alpaca herd breeds and grows, the return on your initial investment multiplies at a strong and steady rate. Along the way, you’ll receive numerous tax benefits and incentives that make your investment even more attractive! Deductible expenses, capital gains benefits, and insurable, depreciable investments are just a few of the many ways you can save money while also taking part in one of the most exciting industries in the world.

(Information taken from  http://www.section179.org )

Deductible Expenses:

Also refer to Section 179 from the IRS that allows a substantial deduction each tax year for expenses

Please refer to IRS Publication 225, “Farmer’s Tax Guide” for more information. It can be attained at the IRS website http://www.irs.gov

Your accountant can advise you of your tax structure and we recommend that you follow that advice.

These are just a few of the exciting
tax advantages of alpaca ownership