I've also wondered if in a restaurant, and your employees are allowed to have meals for free, do you have to file a form for that or add the value to the employees paycheck and pay the taxes on that? And if you do, can you then deduct those food expenses from your gross income?
I don't think so.
I once asked my accountant, I think the fourth year after I started the company "So, I had to throw a bunch of old material away in the dumpster, I get to write that off, right?"
He's like..."uh....No...you already deducted it the year you bought it, right?"
"uh...yeah"
"So you're asking me if you can deduct it twice, then?"
"umm.....I see your point!"
"s'okay" he smiled "everyone asks that question."
The IRS figures you deducted it already when you included it as a list of business expenses for that year. Whether you sold it, donated it, gave it away, threw it away, doesn't matter. All they look at is gross income vs. expense. Now if it were a piece of equipment that could depreciate, that's another matter. I get people calling us all the time for donations of material because of the type of business we're in.
"But it's tax deductible!" they say. "No,...it's not" I answer. "I can't deduct it twice."
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