deducted from revenue of other sales? EXAMPLE:
I purchase two items to resell them:
Item A: Purchased at $50 and sold at $100
Item B: Purchased at $100 and sold (for a loss) at $50
What is the cost-of-goods-sold (COGS) for Item B, $50 or $100?
If it is $100, only $50 of that COGS is necessary to eliminate the profit on Item B. Can I then "transfer" the COGS from Item B to Item A -- that is, deduct the remaining $50 from Item A?
If that's allowed, I would not have to declare any income.
EDIT:
Ernesthinton: OK, there is only one space on the tax form. However, to arrive at the correct figure for that space on the form, do I have to compute COGS per item or collectively? Thanks.
EDIT:
The business is taxes on its net income from all sales, not on its net income from each sale. Therefore, it would make sense that the total COGS from an item sold at a loss, even that portion of it in excess of the selling price, could be added to total COGS.
I purchase two items to resell them:
Item A: Purchased at $50 and sold at $100
Item B: Purchased at $100 and sold (for a loss) at $50
What is the cost-of-goods-sold (COGS) for Item B, $50 or $100?
If it is $100, only $50 of that COGS is necessary to eliminate the profit on Item B. Can I then "transfer" the COGS from Item B to Item A -- that is, deduct the remaining $50 from Item A?
If that's allowed, I would not have to declare any income.
EDIT:
Ernesthinton: OK, there is only one space on the tax form. However, to arrive at the correct figure for that space on the form, do I have to compute COGS per item or collectively? Thanks.
EDIT:
The business is taxes on its net income from all sales, not on its net income from each sale. Therefore, it would make sense that the total COGS from an item sold at a loss, even that portion of it in excess of the selling price, could be added to total COGS.