Investing in alpacas

The following is not tax advice. It is only provided to help make you aware of potential Federal Tax reduction codes that may be available to you when you buy an alpaca. More information can be found at http://www.irs.gov/publications/p225/index.html. We would be happy to go into more detail with you on additional particulars but it is imperative you consult with a Tax Expert, such as a CPA. We are not Tax Experts. Current guidelines for "Section 179" Depreciation allowance for 2007 is set at $125,000 and indexed higher for 2008. 2007 purchases, qualifying under Section 179, can provide up to $125,000 in tax liability reduction. A couple things to think about:

Section 179 provides more shelter for higher tax brackets. Many people wait until they retire before they buy their alpacas. Chances are you save more in taxes if you buy while you are working. This reasoning should apply whether you use Section 179 or regular depreciation schedules.
You do not need to have alpacas on your farm to obtain the tax advantages of owning livestock

For example: If you purchase qualifying assets* in the amount of $142,000

Section 179 expense will allow (2007)	$125,000

bal of $17,000 depreciated over 5 years (for breeding livestock)	$3,400
Total depreciation for the first year	$128,400
This would reduce you tax liability of ordinary income or capital gains by $128,400.
* If you are purchasing alpacas with Section 179 depreciation expense in mind, please consult with your accountant on how this applies to your particular circumstances. Please feel free to contact us regarding other tax saving benefits specific to livestock and business plan assistance.

Financial Aspects of Alpaca Ownership

I.R.S. Section 179 Depreciation Expense