Widgets A and B were purchased for resale, yes COGS.
Widget C was an expense since it was not for resale.
Widget B was inventory on Dec 31,2020.
Widget A was sold and the sale price is included in income.
Widget C -no itemized receipt, is there another way to show its approximate value, if you were audited? Comparable sales of the item? If you believe the item to be under $2,500 and have a way to show that is reasonable, then take the Safe Harbor - if that is your preference over depreciation.
The IRS on Deducting Expenses
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