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Can a wholesaler deduct all inventory purchases immediately?

Short answer

Do not assume every inventory purchase is immediately deductible. The timing depends on the business’s accounting method and applicable inventory rules. Some qualifying small businesses have alternative methods, but their records must still clearly reflect income.

Example

Buying additional merchandise in December does not, by itself, establish a December tax deduction.

What to review

The current inventory method, year-end quantities, purchase records and whether a proposed change requires an accounting-method change.

Official source: www.irs.gov/publications/p538

Related service: Wholesale & Distribution Accounting

This answer is general information, not advice for your specific situation. Tax rules change, so please contact us to review your facts before acting.

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