Are there tax advantages to owning Alpacas?
Yes. As a breeder you can depreciate a male or female alpaca for breeding purposes over a five-year period. Furthermore, the first year that the capitol asset is acquired, there is a maximum of $18,500 which can be used as a business expense item. Income derived from the sale of capitol assets is usually taxed at a lower rate than that of income derived from other sources, such as regular earnings. Any expenses, which you incur such as veterinary care, feed bills, or any other costs associated with the raising of your alpacas are deductible. As an active breeder, there is also the ability to depreciate tangible property, such as barns, fences and breeding stock. Section 179 of the tax code currently allows for the deduction of a capital asset up to $100,000 in the first year the asset is acquired. Capital gains can be available on the sale of breeding animals and their offspring. You need to consult a tax advisor for specifics as they relate to you.
