The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Inventory is income?||Date: 9/25/2012 1:02 AM|
|Author: Jeanwa||Number: 116657 of 123001|
What the example boiled down to (in my apparently muddled thinking) is that the poster was saying the equivalent of "unsold inventory = taxable income".
I should have said gross income, using net income was poor terminology on my part. I assumed, incorrectly that there were no other expenses.
Well, it is a bit more complicated than that. The left over inventory is really gross profit (some call it Profit from Sales and some call it Gross Margin)
From that we subtract all the other expenses. Utilities, Rent, insurance, etc.
Does that help?
I still wish I could say it better.
If that were true, then each home buyer would record the sales price of the home as income the year of its