Can you purchase an item from your second business?

[Michellesong]

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?

[Critter-3 · Accepted solution]

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]

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]

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]

@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]

thank you very much!

[Critter-3]

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