Dry Ice 1120s tax return: can sublimation loss be calculated for a tax return $$ loss?

[Anonymous_]

This is unusual. Can you provide more details or a further explanation of what you are trying to accomplish?

If the dry ice is something you use in your business (e.g., for shipping purposes), then the total cost is an expense and deductible.

If the dry ice is inventory (i.e., held for resale in the ordinary course of business), then the "loss" should be accounted for in the cost of goods sold calculation.

[nagile]

inventory loss (end of each day)

Not sure how this sublimation loss would be:
**classified under cost-of-goods-sold
**measured with $-loss value.

From www.dryiceinfo.com :
"As a general rule, Dry Ice will sublimate at a rate of five to ten pounds every 24 hours in a typical ice chest. This sublimation continues from the time of purchase; therefore, pick up Dry Ice as close to the time needed as possible. Bring an ice chest or some other insulated container to hold the Dry Ice and slow the sublimation rate. Dry Ice sublimates faster than regular ice melts but will extend the life of regular ice."

[nagile]

NOTE:  Dry Ice Business (purchases from supplier) resells to restaurants, disaster relief, homes etc.

Do you think sublimation could actually be calculated for sales tax refund as well?

[Anonymous_]

Use lower of cost or market (LCM) for your inventory.

In this instance, the original cost of your inventory is greater than its ending value and, thus, you will realize the loss due to "sublimation".