Lifestyle: Alpacas are gentle by nature, easy to care for and a way to enhance your life, no matter where you live – urban, suburban or rural. Have you ever yearned for the pleasure of owning/caring for animals but your busy career doesn’t afford you the time? A small herd can be fed, watered and cleaned in less than ½ hour, before and after your work day! This makes owning alpacas appealing to folks with full-time jobs. After a hard day at the office, there is a comfort, relaxation and perspective associated with the quietness and pleasure of caring for these beautiful animals. If you live in an urban area, you can still own alpacas! You own alpacas that reside on an alpaca farm. This is called agisting! You enjoy ownership benefits, as well as the tax incentive benefits, but you leave the daily care to others for a minimal boarding fee. Perhaps you are looking for a career change or a retirement business….a lifestyle change that is satisfying to the soul? Talk to alpaca owners…they will tell you that alpaca ownership is not just a financial investment, it is a lifestyle investment that your entire family benefits from!
Tax Incentives: As alpacas are considered livestock, there are a number of IRS benefits to ownership. While you should check with your tax advisor about the effects of alpaca purchases on your specific tax situation, the purchase of alpacas offer favorable tax advantages, as well as significant income generation.
To highlight some of the taxing ... first of all, breeding animals are considered a capital asset. As a breeder, you are able to depreciate a male or female alpaca used for breeding purposes over a five year period. Income from the sale of capitol assets is usually taxed at a lower rate than that of income from regular earnings. You may also take advantage of a $100,000 hyper depreciation the first year the capital asset are required (See IRS Publication 225, Section 179). Expenses, such as veterinary care, feed, any costs associated with raising your alpacas, are deductible. You also have the ability to depreciate tangible property, such as barns, fencing and breeding stock. . If you agist, your tax advantages vary from that of an active owner. The main difference is that you hold all of your expenses incurred in the raising of alpacas as a deduction against your profit at the time of sale. This is a short summary of the tax benefits. Refer to the IRS Publication #225, The Farmers Tax Guide, for more detail. Again, you should consult a tax advisor who is familiar with breeding livestock and farming issues.
Investment Opportunity: Alpaca ownership is an excellent method of diversifying your portfolio! It is an excellent way to accomplish tax-deferred income. The small farmer or investor can purchase several alpacas and allow the herd to grow without paying income taxes on the increase value of that herd. Additionally, you can deduct taxable losses to offset taxable income from other sources. As with any investment, there is always a risk involved, and the purchase of an alpaca is no exception. However, alpacas are extremely hardy and easy to raise and they are 100% insurable for mortality and theft. Do you have any other investments that are insurable?
As alpacas produce only one cria a year, the population of alpacas increases slowly. Importation from South America is limited by regulations and the strick guidelines imposed by the Alpaca Registry. This has kept alpaca prices high and stable for the last 20 years. It is commonplace for the female offspring of an alpaca to sell for the same price or more than the cost of the dam. With a breeding life span of 10-15 years, alpacas are considered to be “the world finest livestock investment”.
Breed/Fiber/Sales Market: The price of an alpaca depends on its quality (confirmation and fleece qualities), its bloodlines, whether it is a female/male, its breeding history, along with other factors. Typically, a female alpaca sells for $15,000-$35,000. A fiber/pet quality male alpaca will typically sell for less than $3,000. Quality herdsire alpacas can sell anywhere between $5,000 to over $300,000! Stud fees can range anywhere between $1,000 to $7,500! These prices have remained relatively consistent over the last 20 years ...and the industry right now is all about breeding and sales!
