What are the business aspects and tax benefits of raising alpacas?
First and foremost, breeding and raising alpacas is a business. For example, our farm is quite small (5 1/2 acres). Our business startup costs (barn fence, water, power, phone) was a little less than $20,000 (due to my work, I was unable to do any of the work myself so all was subcontracted). The cost for the animals is a clearly controllable cost but can be significant. The operating costs, in my opinion, are quite reasonable, being not a whole lot more than the operating cost of a family pet. Marketing the product involves a substantial cost. Thus far, I have several hundred dollars involved in this rudimentary web site. Membership in AOBA and two local alpaca breeders organizations cost $500 or so per year. More aggressive marketing costs will be incurred as we start going to shows and start advertising in various publications, etc. The tax advantages of the alpaca business are enormous. (Please note that neither of us are accountants or work for the IRS.) We recommend that people s
