Dentist Turned Alpaca Breeder Changes Daily Drill

I grew up in Southern California, attended UCLA, and then the USC School of Dentistry. A USC Trojan at heart, I opened a general dentistry practice in North San Diego County and enjoyed all the benefits this career has to offer. My team grew the practice into a large office with an in-house oral surgeon, and endodontist, two additional General Dentists, and a staff of 25.Our personal lives were fast-paced and very busy. We seemed to have it all, but at what price? Sound familiar?

A Change in Lifestyle

My wife, Lisa – an Expanded Functions Dental Assistant, and I realized we had burned out on the Southern California lifestyle and dense population in the area. Having always enjoyed the mountains, we decided to make a lifestyle change and move to a smaller mountain community. We made up a wish list for our new home and began scouring the Internet. Our search focused on the Pacific Northwest. In the beautiful Sandpoint, Idaho area, we found a property that ticked off more boxes on our wish list than any other. This one had 20 acres, a year-round creek, gorgeous forests, spectacular mountain views, and a beautiful home on the property. It also just happened to be a former alpaca ranch.

"Century 21 Riverstone helped our family find a beautiful ranch that checked off ALL of our boxes in Sandpoint, Idaho. They saved us time and money."

Dr. Tom and Lisa Davies 

Had we intended to become alpaca ranchers? No. However, Lisa has always been an animal lover, so we purchased two alpacas from the sellers of our property to add a new breed to our two Chihuahuas, one Newfoundland, and one Himalayan cat.

Though we had sold our practice in San Diego, I was not quite ready to retire from dentistry. Fortunately, there was a dentist in Sandpoint who was retiring to Texas. He had a small practice in town, which we purchased. Thus, we went from a huge office to what I affectionately call, the “Shire”- 900 square feet! I’m the dentist, my wife is the assistant, and my mother-in-law (who lives with us) handles the front desk. With our overwhelming growth to our dental office we have added new dental staff.

Having been very blessed in our dental careers, we wanted to give something back. So we set lower fees for the community, and decided to be open Thursday, Friday, and Saturday to accommodate those needing appointments outside the normal work week. For us, this also means a four-day “weekend”. This approach has brought us patients all the way from Washington and Montana! We’ve decided we must be the only office in the Northwest who offers these hours of business. Tom Davies, D.D.S., PLLC is located at: 103 W. Superior, Sandpoint, ID. Please call us at (208)263-8514

Advantages of Raising Alpacas

Back to alpacas…We decided to treat this endeavor as a business, one we could operate simultaneously with a small dental practice without sacrificing our new lifestyle. With the intent to maintain a small herd perspective on raising world class genetics, we purchased a few more animals with champion bloodlines and began building a small herd.

In the process of learning about the business, going to alpaca shows and attending seminars, we discovered there are many tax advantages to raising alpacas. The tax code contains several opportunities for deductions that apply to alpaca ranching. For instance, Section 179 of the Tax Code allows for deductions for capital assets as soon as alpacas are purchased. As an investment, owning alpacas has these additional advantages:

• Alpacas are insurable (Can you do this with stocks?)
  
  
• There are advantageous differences in the way ordinary income and capital gains are taxed under the current law. Alpacas held as business assets for more than one year can be granted special tax treatment. When these business assets are sold, they receive capital gain tax treatment. When sold at a loss, they receive ordinary loss treatment and offset ordinary income.
  
  
• Ranchers can spread their income over the three previous years to allow for fluctuations in income generation. This Congressional law is advantageous since ranch income can vary from year to year. For example, if an alpaca farmer sells a champion stud alpaca one year, it can send farm income soaring in that year when in other years, sales revenues would typically be lower.
  
  
• The tax code looks positively on invested capital in the early years of building an alpaca business. A new alpaca farm will require investment of capital to purchase animals, build barns and fences, and acquire equipment. The tax code looks at these expenses separately.
  • Expenses are the everyday costs of operating the alpaca business
  • Assets are considered any item purchased for the ranch that is expected to last more than one year. Assets are subject to depreciation rules.
  • Inventory is defined as items purchased or produced for retail. In alpaca farming, this includes shorn fleece and fiber, as well as the animals for sale.