The federal government wants to help businesses grow, especially small businesses.
One popular way to do that has been section 179 of the tax code, which allows businesses to write off the entire cost of buying new and used equipment, up to $650,000 worth, in the first year of purchase. That immediate depreciation can shave over $200,000 off a tax bill.
The hope is that the massive savings will be used to hire people, reinvest in the business, or in some other way that benefits the larger economy. It’s good for companies buying new machinery or computers.
Or for alpacas.
In one of the more obscure uses of the tax provision, people who buy alpacas for "business" purposes can immediately write off the entire purchase price of the animal. The average alpaca costs $5,000 to $10,000 each, though prize-winning animals can go for a few hundred grand. Alpaca breeders tout the tax break as a reason to buy.