Can I put undeliverd prepaid purchases on Part V schedule C? If not how do I handle the writeoff?

[maryhartzell]

I did a prepaid  payment of a order and received only part of the order.  I have tried to contact the vendor and got no reply.  I would like to write off the undelivered amount since I had to buy the merchandise from another source.  I cannot get the vendor to return my money  Can I use Schedule C Part V or how do I handle this..

[PatriciaV · Accepted solution]

You actually don't need to "write off" the undelivered portion of your order. If you report the full amount you paid as a Business Expense, you are taking a deduction for the entire order, whether you received it or not. However, if you receive a refund next year, you would need to report the refund as income to offset the expense from this year.