- Sole Proprietors and Single-Member LLCs:
- Multiple-Member LLCs, Partnerships, S-Corporations, C-Corporations:
- IRS Publication 334, Chapter 6: How to Figure Cost of Goods Sold
Why YOU Should Care:
If your business consists of the production, purchase, or sale of merchandise, you may be required to track inventory. You can deduct Cost of Goods Sold (COGS) from the gross receipts of your business, but, to do so, you must value inventory at the beginning and end of the year.