2008 Economic Stimulus Act

The 2008 Economic Stimulus Act Benefits for the Alpaca Breeder (This is the year to buy Alpacas!)   Below are the details, but what this means to the alpaca buyer is that if all the qualifiers are met, they can deduct against other income, a large amount if not all of their purchases of alpacas. Consult your tax advisor to structure your purchases properly to take advantage of these provisions. 50% Bonus Depreciation Available Only in 2008. Includes first year depreciation allowances for certain property. Eligible property includes 10 and 20 year agricultural structures, equipment, and production livestock with a recovery period of 20 years or less. Must be placed in service before January 1, 2009. Qualifying Property The property must be new or placed into production for the first time by the purchaser. Production breeding animals such as dairy cows, sheep, goats and alpacas are classified as new if they have not produced offspring or milk. To qualify a female can be pregnant, but not have had a cria. A male cannot have any offspring born. Section 179 Increases to $250,000 in 2008 and will drop back to $128,000 in 2009. Qualifiers: Expense Limit : $ 250,000 Deduction phase out begins when investment in qualifying property exceeds $800,000. New and used equipment both are eligible. Assets with a depreciable life of 10 years or less quality. Sole proprietors and single member LLC’s can use Section 179 against W2 income and other Schedule C profits. Partnerships and Corporations can only use Section 179 to reduce the profits to zero.