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Is there a new tax incentive for small business where a portion of inventory is deductible?

November 10, 2008

Distintictive asked:


My friend told me about this. I am not sure if she heard it right so this may be nothing. She heard that this year an incentive is in the works where small business can deduct half on their inventory as an expense. Is there any truth to this? I already deduct my purchases less inventory as cost of goods sold so I don’t know if this would be in addition to this. If anyone knows anything about this please share.

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Comments

4 Responses to “Is there a new tax incentive for small business where a portion of inventory is deductible?”

  1. Ryan M on November 12th, 2008 10:14 pm

    Not too sure about inventory being deductable, but you can deduct a portion of fixed asset purchases throught a section 179 deduction.

  2. bostonianinmo on November 13th, 2008 3:16 pm

    Methinks your friend has been smoking something illegal. Inventory figures into your CGS as you already know but any further deductions are a matter of dreams or drug-induced stupor as far as I know.

    And if someone proves me wrong in this, I’ll happily eat crow right here!

  3. jeff p on November 15th, 2008 7:20 am

    some times a company might donate some inventory (usually items that don’t sell) to a charity as a tax deduction. Other than that, I don’t think bostonianinmo will be dinning on crow soon.

  4. Brian J on November 18th, 2008 6:38 am

    The economic stimulus package that everyone talks about for their tax rebate also has business incentives involving enhanced Code Sec. 179 expensing and bonus depreciation.

    See the details starting on page 5 of the following reference: