Don and Sherry were heading home after visiting their first Alpaca ranch. They had gleaned much information from their visit. Sherry turned to Don and said, “So what are you thinking?” Don looking contemplative said, “I tell you what we sure did get a lot of information, but the one thing that stood out for me were the tax benefits. Lets make an appointment with his tax accountant this week and explore this a little further.”Before I go any further, I am not an accountant or a lawyer and I would highly suggest that you get with an accountant that is familiar with this business. I will not get into specifics, but will introduce you to some of the important benefits that you can explore further with an accountant.Alpacas are what are called a livestock investment in the tax world, and you couldn’t choose a better livestock investment than Alpacas. Why? These animals produce offspring every year. More importantly, they birth females about forty percent of the time, and as the females begin producing babies (crias) the value of your herd goes up.The tax benefits we will talk about in this article will be limited to those that are starting their business by boarding their animals. Are there actually tax advantages if you don’t have your own land and are not actually ranching? You bet!So what are some of the tax benefits?1. If your alpacas are kept for breeding stock they can be depreciated over five years. You will be able to deduct 1/5th of the cost each year, although, the first year allows only for the first six months.2. Building a herd takes time and the I.R.S. recognizes this. They will allow you to defer taxes on your animals. This allows you time to grow your herd and many times not have to pay taxes until you sell them.3. Accelerated methods of depreciation also exist. This allows you to write off a larger percentage of the cost of an Alpaca early in its life.These are just some of the tax advantages to owning and building a herd. If these examples peak your interest seek out a Certified Professional Accountant that is familiar with Section 179 of the tax code. Talk to Alpaca ranchers. They can direct you to a reputable C.P.A. that is familiar with this business.