Thanks for your responses. We have a similar situation, but with a little exception. We are "information services" company (multi-member LLC) and we have no inventory and do not sell any tangible goods. This year we've provided custom software development services for our customer, but outsourced some of those services to the freelancers. So, should we put the full amount of payments for outsourced services to 1125-A as a Cost of Labor or Purchases or Other Costs? Or we can just put it as Contracted Services under the Ordinary Expenses on 1065? This decision will change a gross business income; does it metter for business or individual members tax purposes? Thank you!
