There can be tremendous tax benefits to launching an alpaca farm.
Because alpacas are livestock, you can also take advantage of special Section 179 depreciation that allows full write-offs on your barn, fencing, and even the purchase of your alpacas in their first year of use.
When we first approached our CPA asking if we could write-off the farm expenses against standard income, he said that wasn't possible. However, his specialty was not farm taxes. After reviewing the IRS publication, #225, entitled The Farmer's Tax Guide, we were able to show our accountant that the IRS does allow that deduction. He ultimately agreed and we received a substantial refund after our first year of operation.
Through operating our own farm, we can give you advice based on our situation, but we are not tax advisors. Do your research but also consult a tax consultant regarding your specific situation. The tax benefits of alpaca ownership are great and more information on them can be found at The Alpaca Owners Association.