"And if you do just expense the materials you buy, that, and your labor and related costs, are still Cost of Goods Sold. You just aren't adjusting for inventory changes."How about here:http://www.irs.gov/Businesses/Small-Businesses-&-Self-Em...where it says "This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million."They might have the tiniest raw material left over after the ball drops but it's so insignificant I thought the IRS rules allow for ignoring such amounts to simplify taxes for such tiny businesses. Isn't that the point of this $10M rule? The business I'm talking about is closer to $35K! That's about 0.35% of the $10M!
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