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pimpjokerboi · 01-08-2010, 04:38 AM

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hello

i am staring an online business where i will be buying and selling so i wanted to know how should i take care of this as suppose i buy $100 product and then sell it for $150 (profit $50). Plus i am having 50% partnership so it will be $25 in my hand and i am paying my partner via moneygram or bank account. All the buying and selling transaction will be taking care of from paypal. So should i just print or save the buying transaction on my computer and and then staple it to the transaction which i sold it. Wont tax people care because they wont know if the bought and sold item are same or not.

I will be selling 100s of products a day so i just to be sure about all this.

thanks

Skyhawk · 01-10-2010, 12:44 AM

See section 6001 of the U.S. tax code. YOU are required, by law, to keep records of all income and expenses. There are a variety of acceptable methods of recording "inventory", e.g. FIFO, LIFO, lower of cost or market, specific item, etc. PICK a method and follow the rules that accompany the method AND use the method consistently. FIFO (first in - first out) is the least complicated, but you can use the "specific item" method as you suggest. Get professional help, if you need it, to set up an accounting system.