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We hear many of the same questions about Alpaca Breeding . . . hopefully some of these might answer questions you have too! This would be a great place to start in formulating questions to ask on farm visits.
If you have specific questions for Peggy feel free to send her an e-mail
peggy@alpacadigest.com
Click On Each Question For Peggy’s Answers
How do I buy a herd with money that would have gone to taxes?
What services does your farm/ranch provide?
Can we spend the day working on your ranch with you?
Would it be possible to schedule a ranch visit when the vet is there?
Do you offer Agistment (Boarding) If Our Farm Isn’t Ready Yet?
Do you offer financing and what are the terms if you do?
How Does The IRS determine if I have a business or a hobby?
Selecting the Proper Legal Structure For Your Business
We’ve Got a Terrible Fly Problem ... Any Suggestions?
How do I handle the tax issue if I lose an adult alpaca?
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Dear Peggy,
I read your web site about buying a herd with money that could have gone to taxes. I don’t fully understand how it works.
The quick and dirty of it . . . say you purchase $100,000 in alpacas and are in the 45% tax bracket. You will recognize $45,000 in tax savings by your alpaca purchase. That tax savings can go a long way toward paying off the original cost of your herd. If you finance the purchase of your animals it is a really great way to leverage into developing your herd. Many breeders, like us, will allow you to finance the purchase over four years with a reasonable down payment. And during that four year period your breeding program can have sufficient babies (crias) to fund the full payment of your original herd and a healthy profit.
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What services does your farm/ranch provide?
We provide breeding, agistment, training and consulting services. We have flexible financing arrangements. All of our females of breeding age are sold with a breed back for the following year. All of our alpacas are handled on a regular basis to assure they are halter trained and easy to handle.
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Can we spend the day working on your ranch with you?
We offer a seminar series which focuses on “hands on experience”. We always welcome farm visits and we never turn down free help! I would highly recommend spending a day cleaning and working with our “kids”. You will immediately learn the answer to some of the questions you have been thinking about.
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Would it be possible to schedule a ranch visit when the vet is there?
Absolutely! Doctor Hunter is more than happy to have visitors when he makes his weekly visit. He is generally here on Thursday afternoon--though he might be here any day during cria season. An afternoon with “Doc” is now part of our Hands On Seminar
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Do you offer Agistment (Boarding) If Our Farm Isn’t Ready Yet?
Yes, we offer up to one year FREE agistment with the purchase of any of our animals. After that year it is $90 per month per alpaca.
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Do you offer financing and what are the terms?
Yes, one year no interest with a reasonable down payment and up to 5 years at 5% interest. Click Here For Full Information
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How Does The IRS determine if I have a business or a hobby?
Here are the links (Business or a Hobby MSSP On IRC Section 183) where the IRS discusses whether your alpaca adventure is a business or a hobby. Now before you state the obvious from the title of the second link—alpacas are neither cattle nor horses—but this format would be the basic guideline for any “livestock” type operation.
If you check out these two links and review the questions in the MSSP you should be in good shape if the IRS ever asks if you are a hobby or a business. If you have any questions don’t hesitate to write peggy@alpacadigest.com
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Selecting the Legal Structure For Your Business
This is a very important decision for you to make. You should consult with your tax professional. Here is an article by the Small Business Administration (Article) discussing the different entities and as always I would be happy to answer any questions you have peggy@alpacadigest.com
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We Have a Terrible Fly Problem ... any suggestions?
Fly predators have used on our farm with great success in our on-going fight with flies on our farm. Here is the website for Spalding Laboratories. http://spalding-labs.com/home.php
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How do I handle my taxes if I lose an adult alpaca?
For tax purposes that is called an Involuntary Conversion. If you have the unfortunate occurrence where a fully insured alpaca dies you process the transaction as follows:
- If you don’t replace the animal the proceeds are taxable to the extent the insurance proceeds exceed the book value of the alpaca.
- If you replace the animal with another one of equal or greater value no gain will be recognized.
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