Items withdrawn for personal use

Forum|Forum|2 years ago
April 3, 2024
1 reply
8 views

What is the reason for disclosing items withdrawn for personal use on a Schedule C? My client is a vitamin reseller and sells them to customers. AND she needs to use them for personal health. How does it help my client to disclose the amount withdrawn for personal use?

Lacerte Tax

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J

jharvey

Level 5

The input for "Cost of items for personal use" is there as a reminder to ask taxpayers if they used any of their business purchases for personal use so those amounts can be removed from cost of goods sold, Schedule C, page 2, line 36 which says "Purchases less cost of items withdrawn for personal use".

The two entries of purchases and cost of items for personal use are merely netted together before carrying to the Schedule C. The personal use items aren't actually disclosed to the IRS anywhere. They are just removed from the computation as they are not valid business related purchases.

S

strongsilenceAuthor

Level 10

Thank you Jharvey.

I noticed that when I reviewed the COGS detail that the personal use items are not disclosed.

I appreciate your help.

This client is 82 years old and sells vitamins and has had 3 losses and 2 years of profits ($7 and $500) in the last five years. Their activities show me that they are self-employed and profit seeking but I want to keep the IRS out of their cross hairs. For 2023, it is tempting to lower the COGS to show a profit.

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