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Subject:  Re: Inventory is income? Date:  9/25/2012  12:31 PM
Author:  ptheland Number:  116663 of 127753

What the example boiled down to (in my apparently muddled thinking) is that the poster was saying the equivalent of "unsold inventory = taxable income".

That explanation would be wrong. So that might be why you're confused.

What they should have been saying is "unsold inventory = a tax deduction that is deferred until the inventory is sold".

Unsold inventory is not taxable income. Unsold inventory is eventually a deductible expense, but its just not deductible until it's sold. Once the inventory is sold, you can claim a deduction for the cost of the inventory.

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