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Can I deduct, on schedule C, the cost of obsolete inventory that was discarded?

 
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Can I deduct, on schedule C, the cost of obsolete inventory that was discarded?

There is not a specific place to enter inventory that was unsellable at the end of the year.  The proper way to account for this inventory is to leave it out of your final inventory count.  

When you enter your ending inventory do not include the inventory that was obsolete.  This way you get a deduction for the cost of purchasing the inventory.  

You will only get a deduction for the amount you paid to purchase the inventory.  You do not get to deduct the "lost revenue" from not being able to sell the inventory.

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Highlighted
Level 10

Can I deduct, on schedule C, the cost of obsolete inventory that was discarded?

There is not a specific place to enter inventory that was unsellable at the end of the year.  The proper way to account for this inventory is to leave it out of your final inventory count.  

When you enter your ending inventory do not include the inventory that was obsolete.  This way you get a deduction for the cost of purchasing the inventory.  

You will only get a deduction for the amount you paid to purchase the inventory.  You do not get to deduct the "lost revenue" from not being able to sell the inventory.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post