Tax write-offs can be one of the major financial benefits of alpaca ranching BUT:

1. You must operate the ranch in a business like manner. ie. Appear to be trying to make a profit.

2. You should have an organized business plan and be able to justify your business decisions.

You or your spouse must be actively involved in the industry
You must have adequate bookkeeping methods

A. Depreciate total purchase price of alpacas over next 5-7 years from the date of purchase (even if You only paid part of the sum), Wisest to purchase a breeding herd of 3 females + 1 male (can be gelded) but you can start out with 2 the first year and add as you go - they will multiply on their own anyway.

B. Depreciate any buildings, fencing, driveways, dredging of ponds, vehicles, trailers, tractors, etc, used in the running of your ranch.

C. Deduct all repairs, maintenance, tools, ranch hands, accounting fees, legal advice, vehicle insurances & licenses, property taxes, mortgage interest or leasing fees on actual farm. All supplies, stationary, film & photo finishing (even if there is only I alpaca on the roll), postage or correspondence concerning alpacas. Computer (if under $5000) entire amount can be deducted in the year of purchase or depreciated discuss with your accountant. - + on-line fees, CD attachments. And of course, all advertising, signs, brochures, etc directly dealing with alpacas.

D. DEDUCT office expenses. If the office is in your home then calculate percentage of area of your house used as an office. Use this percentage to claim your utility, heat, property taxes, etc. Also DEPRECIATE percentage of house used as office, desks, rugs, filing cabinets, FAX equipment, etc. Take care with this item and be prepared to justify it.

E. DEDUCT all expenses for travel (ie. Motel, food, tolls, parking fees, entry fees, gas & oil, etc.) while going to see some alpacas farms, shows, whether they're in Florida, Canada, New Zealand, Australia, England or most of South America. DEDUCT going to see local alpaca/llama farms, State fairs, farms in general that give you ideas on how to manage your farm or change your fencing, etc.

Be creative but start each year by putting aside a box labeled "Alpacas-2001", etc. During your travels take pictures & label them, save all brochures, sales lists, business cards (even from farm stores). Keep a log in your vehicle & jot down where you went, name of person spoken to while there and/or their business card, store for film, post office to buy stamps, etc.

On more extensive trips you can stop and sightsee or visit relatives so it's best to collect a list of alpaca places along the way to justify your travel (and then take pictures of the owners preferably with their ranch sign in the background, get their business card - most alpaca owners will welcome you). Jot down mileages in your log.

Put all the collected business cards, brochures, log, etc. for each year into your "Alpaca 20.." Box & save for minimum of 3 years.

We can supply more extensive/structured tax advice as well as IRS regulations and you should talk to your accountant or advisor, Not all businesses are successful but the intent to make a profit must be there and must be well documented.

And be reasonable!