Alpaca Farming
Business versus Hobby
- Deductions are assumed in an activity where there is a Profit
Motive and activity is Run as a Business.
- Breeding and Sales of Alpacas is a Business Activity.
- Establish and maintain a Separate Checking Account; establish a
Farm Name; and appropriate advertise such as with a sign or display ads.
- Your activity is assumed to be for profit if profits are shown in
2 out of 7 years of operation. (Law is specific to horses--but can be
applied to Alpaca and other breeding stock.) (Otherwise, the general
rule specifies 3 out of 5 years.)
Tax Advantages
- Sales Tax Exemption when purchasing items used for agricultural
purpose
- CAUV Real Estate Tax Relief for land used for pasture and farm
purpose
- Favorable Capital Gain Rates apply to certain animal sales
- Income Taxes--Deductible Expenses (see Alpaca Flyer for additional information)
