Alpacas are the world's finest livestock investment. Alpacas produce a premium fiber in 22 different colors, the demand for such fiber is always increasing. Fiber yields are between five and twelve pounds per year, per animal. Many times the profit from the fiber will offset all feeding and normal medical costs of each alpaca. In the mid 1980's alpacas appeared almost simultaneously in several countries where they had never been seen before. United States, Canada, New Zealand, England and many other European countries have all acquired a foundation stock. The reason, alpacas are both profitable and enjoyable. It is common for a female offspring of an alpaca to sell for as much or more than was paid for the dam. Therefore, returns of 30% to 70% are not uncommon. Alpacas are so easy to raise all you need is a few minutes each day and lots of love. They are warm and friendly yet strong of character. They can be easly transported in a family mini-van or an animal trailer.
	Tax Deferred Wealth Building: With your alpaca herd increasing in value, income taxes are deferred until offspring are sold. This creates a considerable advantage over traditional investments.
Tax Advantages of Alpaca Ownership: Alpaca ownership offers many unique tax advantages, including sheltering income from other sources, expensing farm related business items, use of depreciation and capital gains treatment. If you actively raise alpacas for profit, all expenses attributable to them can be written off against income. Typical expenses include feed, fertilizer, veterinary costs, depreciation of breeding stock, barns, fences etc. The major difference is the tax treatment between active and passive owners. Passive owners may only deduct losses from their investment against the sale of animals and fiber whereas, active owners can take all losses against other income. Additional expenses that may be tax deductible are vehicle mileage for farm related miles, interest, rent, attorney and CPA fees, farm related travel and educational expenses, advertising, hired labor, farm fuel, association dues, breeding fees and real property improvements. There is also a direct write off method known as Section 179 that allows a substantial deduction each tax year for newly acquired and long term depreciable assets. There are several limitations to this section. This is a brief overview of the current tax laws, please refer to you tax professional for more complete information.