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Alpacas Make One Hairy Tax Break

Posted Apr 5, 2007 11:41 AM CDT
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Alpacas -- the svelte cousins of the llama -- don't earn much money for U.S. ranchers. But, thanks to Congress, they make one heck of a tax break.

The number of alpaca ranchers has roughly doubled to more than 4,200 since 2002, according to the Alpaca Owners & Breeders Association, and they own about 100,000 of the beasts. The animals have grown in popularity because of a 2003 law that allows small-business owners to write off 100 percent of newly acquired assets in the first year, rather than depreciate them over several years, the Wall Street Journal reports.

"Alpacas have suddenly become the investment animal of choice by a subculture of doctors, lawyers and other unlikely farmers lured in large part by new tax breaks," the paper says.

Critics worry this is a speculative bubble that will end badly. Prices of llamas collapsed in the early 1990s because too many were imported.

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