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brittfinkle
New Member

If I have a company that rents bridal accessories, should I be putting the inventory as COGS or depreciating over time? Or can I do both?

 
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MichaelL1
Level 15

If I have a company that rents bridal accessories, should I be putting the inventory as COGS or depreciating over time? Or can I do both?

COGS is for items that are sold to customers in the normal course of business.

Rental of bridal should not be in COGS.  

The items if the material in cost should be depreciated over the useful life.  You cannot do both as no double benefit is allowed.

I do realize you may sell some of the used rentals later but that is not the bread and butter of the business. 

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3 Replies
MichaelL1
Level 15

If I have a company that rents bridal accessories, should I be putting the inventory as COGS or depreciating over time? Or can I do both?

COGS is for items that are sold to customers in the normal course of business.

Rental of bridal should not be in COGS.  

The items if the material in cost should be depreciated over the useful life.  You cannot do both as no double benefit is allowed.

I do realize you may sell some of the used rentals later but that is not the bread and butter of the business. 

brittfinkle
New Member

If I have a company that rents bridal accessories, should I be putting the inventory as COGS or depreciating over time? Or can I do both?

Super helpful - thank you!  And where do I show depreciation on a schedule C? Or is there a different form for depreciation of assets?
MichaelL1
Level 15

If I have a company that rents bridal accessories, should I be putting the inventory as COGS or depreciating over time? Or can I do both?

In the Sch C area it will ask about assets that were acquired during the year and then allow depreciation and/or faster write-off the outfits.

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