Mow with Alpacas

The Official Google Blog reports that Google has hired goats rather than lawnmowers to take care of their lawn in their Mountain . Why not hire some alpacas to mow? They would provide the same benefit. In addition, you can harvest their fleece once a year and they offer great tax advantages. Let’s face it. They are really cute lawn ornaments!

Leave a comment and tell us what you think.

Alpacas are certainly a hot trend in investing right now. Since Christmas, we have entertained no fewer than 7 groups of farm visitors interested in investing in alpaca breeding stock.  So yes, the market for alpacas is still great and the number of alpaca farms is growing!

Traditional farmers are finally coming around to the benefits of raising and breeding alpacas. They already have the land and the animal husbandry knowledge. Those already in cattle or horses are coming around to the benefits to having alpacas as a way to diversify their operations. The Washington Post’s story, Old MacDonald Wouldn’t Recognize This Farm, documents one farm’s move into alpacas and away from hogs and cattle. As the suburban sprawl continues and the price of acreage increases, it is more difficult for cattlemen to justify the huge amount of land it takes to have a profitable operation. John Underwood chronicles some of the problems cattlemen face in our region in his article,  Urbanization Impacts Residents Engaged in Animal Husbandry.

With their cute faces and the tax advantages that come with them, alpacas are an attractive investment. More and more people are falling in love with them every day.

My dream is to one day hear preschool children singing, “And on his farm he had alpacas. Eeeiiieeeiiioooo! With a hmm* hmm here, and a hmm hmm there, here a hmm, there a hmm, everywhere a hmmm hmmm…Old Mac Donald had a farm…Eeeiiieeeiiiooo!”

*Alpacas hum. That’s the noise they make.

On Oct. 3, President Bush signed into law the Emergency Economic Stabilization Act of 2008 (the “Act”). Most of us have referred to this legislation as the “Bailout” package. The final bill
contains items that impact small business and individuals other than assistance to large financial institutions. We just received a synopsis of the key elements and the following may be of interest to AOBA (Alpaca Owners and Breeders Association) members.

1. Emergency economic stabilization related tax measures consist of a three-year extension for home mortgage debt forgiveness relief.
2. Bank customers will receive $250,000 in Federal Deposit Insurance Corp. protection per depositor through Dec. 31, 2009, a temporary increase from the current $100,000.
3. The 2008 Act boosts Alternative Minimum Tax (AMT) exemption amounts for individuals for 2008, and also provides that for 2008, personal nonrefundable credits may offset AMT and regular tax. Additionally, the 2008 Act also liberalizes the AMT refundable
   credit amount rules.

More than 30 tax breaks that either expired at the end
of 2007 or are soon to expire have been extended by the 2008 Act. For example,
all of the following individual tax breaks are retroactively revived to apply
for the 2008 tax year and are extended to apply to the 2009 tax year as well:

• the election to deduct state and local general sales tax
• the above line deduction for higher education expenses
• the above line deduction for educator expenses
• the ability of taxpayers age 70 1/2; or older to make nontaxable IRA transfers to eligible charities
• the research credit (which is
  also modified),
• the 15-year write-off for qualified leasehold improvements and
  qualified restaurant property (which is also liberalized)
• enhanced deductions for certain charitable contributions (which is also liberalized for
  farmers),
• and the expensing option for qualified environmental remediation
  expenses

New tax relief measures include:

• relaxed write-off rules for film and TV productions
• quick 5-year depreciation for many types of farm
  property
• modified rules for the penalty on understatement of a taxpayer’s
  liability by a tax return preparer
• mental health parity rules
• liberalized rules for the refundable child tax credit

AOBA (and Alpaca Farmgirl!) do not offer tax advice and this information is just a brief overview of portions of the Emergency Economic Stabilization Act. You should consult your tax advisor for specific details on how the new act might affect you and your farm or ranch. If you would like a referral to an accountant who is familiar with alpaca related tax issues, email me at alpacas@bellsouth.net.