@kaplan wrote:
Thanks for confirming, that's the feeling I got as I wrote my question.
It's similar to giving away free samples of your inventory or selling items "on sale." You deduct the cost of goods when you acquire your inventory and you report the selling price when you sell. If you sell for less, or give the product away, you don't have a "loss", you just have less income to be taxed.
(If you were an accrual based taxpayer, I believe you would book the entire revenue for all your hours then take the unpaid hours as a loss, but the net income is still the same in the end.)
