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Can I deduct inventory I bought but have not sold?

Bookkeeping & accounting basics

Generally no. Inventory is an asset until sold, at which point its cost moves to cost of goods sold and reduces taxable income.

Some small businesses can elect simplified treatment, but the default rule is that stock sitting in a warehouse is not yet a deduction.

We handle this for founders running US companies.

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Check your EIN confirmation letter (CP 575) first. If that is gone, look at a previously filed tax return, a business bank account application, or any 1099 you have issued. Your bank or your payroll provider will also have it on file.

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