Alpacas as an Investment
Thinking about investing in
alpacas? We're sometimes asked why the price of some alpacas are "so much!"
We like
to compare buying an alpaca to buying an oil painting. An interested buyer could
buy an oil painting of Elvis Presley on
velvet. That oil painting wouldn't
have a great value--except to the person who purchased it. On the other
hand,
Van Gogh's painting "Irises" sold at a 1987 auction for $49 million.
You can own a "black velvet" alpaca
or you
can own a "Van Gogh" alpaca.
Reasonable financing packages are
available for alpacas purchased from Big Meadow Creek Alpacas.
Unlike the stock market, alpacas are considered a
livestock investment and depreciable
over five years, giving the investor
an immediate investment return in
tax savings while the herd is growing. Alpacas qualify for Section 179 of the
tax code.
Numerous tax benefits are available
to alpaca breeders, with increased Section 179 benefits available through 2010.
As you
raise your alpacas, all expenses
(i.e., fencing, hay and straw, medical and farm supplies, large equipment such
as tractors, traveling to shows, advertising,
etc.), are deductible. An alpaca farmer can depreciate the first $250,000 of the
investment
in a qualifying alpaca farm. In
many states, those involved in farming can also see a significant reduction in
real estate taxes.
A very helpful IRS publication, #225, entitled The Farmer's Tax Guide,
can be obtained from your local IRS office. But I encourage you to talk
with your CPA to determine how alpacas may fit into your life and whether an
alpaca investment is
the right decision for you.
