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Michellesong
Level 1

Can you purchase an item from your second business?

If I own two businesses am I allowed to purchase something from business A as a promotional it for business B and claim the full value as a write off?

1 Best answer

Accepted Solutions
Critter-3
Level 15

Can you purchase an item from your second business?

Sure ... Business A sells a product and reports the sale  and Business B buys a product and deducts the expense properly.  The fact that you own both businesses is immaterial.  

View solution in original post

6 Replies
Critter-3
Level 15

Can you purchase an item from your second business?

Sure ... Business A sells a product and reports the sale  and Business B buys a product and deducts the expense properly.  The fact that you own both businesses is immaterial.  

Hal_Al
Level 15

Can you purchase an item from your second business?

Yes. As Critter 3 explained, Business A reports the sale amount as income and Business B deducts the purchase amount as a business expense, assuming the item was used for a business purpose.

 

That said, it's not clear what your wording means ("as a promotional it for business B"..... "claim the full value as a write off").   What is the item and how will Business B use it?

Michellesong
Level 1

Can you purchase an item from your second business?

Hi Hal_Al,

I was doing a monthly promotion and giving away a summer swag bag full of summer products for my tea business (Company B).   Items included were a custom made beach themed tumbler that was from Company A, tea, and a beach thermal.

 

Hal_Al
Level 15

Can you purchase an item from your second business?

@Michellesong 

 

The answer is still the same. Company A reports the sale amount as income and Company B deducts the purchase amount as a business expense, since giving away items, to potential customers, as a promotion, is a legitimate business expense.

 

 

 

 

Michellesong
Level 1

Can you purchase an item from your second business?

thank you very much!

Critter-3
Level 15

Can you purchase an item from your second business?

Give aways and promotional items could be advertising especially if the items have your business name on it.

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