schedule C line 36

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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ketanco
Posts: 130
Joined: Wed Jul 24, 2013 7:09 pm

schedule C line 36

Post by ketanco » Thu Mar 14, 2019 6:48 am

Hello,
Question 1) Can line 36 (purchases less cost of items withdrawn for personal use) be negative amount on schedule C?

The tax software I am using doesn't allow it. Because the items I withdraw is larger than my purchases (so it means I withdraw from existing inventory in other words) so doens't line 36 need to be negative? If a negative is not allowed there then how do you handle when you withdraw from your inventory more than you purchase that year (so again, you withdraw form existing inventory in other words)

Question 2) And what if you do not withdraw for personal use but just throw some inventory away? For example, for domain names in inventory, cancelling the domain names in your inventory (throwing them away) versus pulling for your own use under your name so you keep paying for it yourself, out of business. So if you cancel, you do not write as negative to line 36, but if you continue to use it personally then you should write it negative to line 36, or not?

nolesrule
Posts: 1336
Joined: Thu Feb 26, 2015 10:59 am

Re: schedule C line 36

Post by nolesrule » Thu Mar 14, 2019 7:10 am

Domain names aren't inventory unless you are in the business of reselling them.

Topic Author
ketanco
Posts: 130
Joined: Wed Jul 24, 2013 7:09 pm

Re: schedule C line 36

Post by ketanco » Thu Mar 14, 2019 7:23 am

nolesrule wrote:
Thu Mar 14, 2019 7:10 am
Domain names aren't inventory unless you are in the business of reselling them.
i sold names yes.... and how about my question? especially question 1

nolesrule
Posts: 1336
Joined: Thu Feb 26, 2015 10:59 am

Re: schedule C line 36

Post by nolesrule » Thu Mar 14, 2019 7:24 am

ketanco wrote:
Thu Mar 14, 2019 7:23 am
nolesrule wrote:
Thu Mar 14, 2019 7:10 am
Domain names aren't inventory unless you are in the business of reselling them.
i sold names yes.... and how about my question? especially question 1
Did you buy them with the intent to resell, or were you monetizing them for yourself and decided to sell?

Topic Author
ketanco
Posts: 130
Joined: Wed Jul 24, 2013 7:09 pm

Re: schedule C line 36

Post by ketanco » Thu Mar 14, 2019 9:55 am

What you ask is a time dependent thing... I don't have much of them, they are all either in a subject in my engineering field or in one other subject that highly interests me so theoretically i could make them website all, but it is also a matter of finding time for it and thinking good content and i just cannot make all of them websites.. so only small portion of them are websites but most sit there undeveloped for either future development or just for selling or to throw away if i decide it is worthless. i can only decide which is which as time passes. this is a small activity, there is a couple hundred dollars worth of names in inventory and i want to finish doing this because i decided that dealing with this is not worth my time.

Returning to original subject, I only gave example about domains in question 2, to show difference between withdrawing an inventory item for your personal use or cancelling them (throwing away). so my main questions are as I wrote in the beginning. I appreciate any help.

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