@Carl wrote:
One thing you might be able to do, is to show that inventory as "sold" for $0. That's the only way I can think of off the top of my head, that will allow you to deduct what you paid for that inventory, from your taxable business income.
It's simply the Beginning of the year inventory plus Purchases less the Ending Inventory that equals cost of goods sold (COGS).
There is no need to "deduct what you paid" as the deduction is included in the lower ending inventory value.
$633 - Beginning of the year; PLUS
$500 - Purchases = $1133
$1133 Less
$500 Ending Inventory =
$633 COGS (which is directly deducted from Gross Sales).
