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03-23-2010, 04:35 PM
Am I required to write off the costs of items I sold?

Business Attorney
03-23-2010, 07:55 PM
Required by whom? GAAP would certainly require you to both reflect the cost of sales in your income as well as in your balance sheet (by reducing the value of your inventory).

Tax laws don't generally *require* that you take a deduction but if you don't take it, you lose it. You can't switch income between years by foregoing a deduction for cost of good sold in the year it is incurred and then taking the deduction the following year. So you would just be artificially increasing your taxable income in the year that you sold the goods without being able to reduce your income by a corresponding amount in a later year.

Can you explain what your thoughts are?

03-27-2010, 11:53 PM
The better question is... why WOULDN'T you write of the cost of goods sold?