Supplies or Inventory

[taxmcp]

Are products purchased not to sell but to advocate/share/demonstrate Supplies and not Inventory?

[TaxGuyBill]

Sure.

If they are not available for sale, they would be supplies. However,iIf they the items are planned on being available for sale after a short time period, I would still list them as Inventory (assuming the client keeps Inventory).

[taxmcp]

Sure.

If they are not available for sale, they would be supplies. However,iIf they the items are planned on being available for sale after a short time period, I would still list them as Inventory (assuming the client keeps Inventory).

Client does not keep inventory and said she does not sell the products. For a doTerra Wellness Advocate whose income on 1099-Misc is not for direct sales, who does not sell any of products purchased, but only shares/advocates/promotes the products, would the principal business activity code still be 454390 Other direct selling establishments (door-to-door, etc.)?

[TaxGuyBill]

Client does not keep inventory and said she does not sell the products. For a doTerra Wellness Advocate whose income on 1099-Misc is not for direct sales, who does not sell any of products purchased, but only shares/advocates/promotes the products, would the principal business activity code still be 454390 Other direct selling establishments (door-to-door, etc.)?

I would just write it off as supplies, and I think I would still use that same Activity Code.

[JohnH]

Probably should just write it off as supplies.

Next year when the client asks what to do with this stuff they still have in inventory, you can say "We already wrote that off last year..."

Then the following year when the client asks what to do with this stuff they threw in the garbage because nobody would ever buy it and they can't give it away, you can say "We already wrote that off the first year..."

At least, that's how things usually go with these multi-level marketing schemes I see client get involved in.

[taxea]

I would just write it off as supplies, and I think I would still use that same Activity Code.

Or advertising materials

[ATSMAN]

I used to prepare returns for Mary Kay and Tupperware ladies. Generally they would withdraw a few items from inventory for either advertising and then personal use. I remember an Amway lady would always argue with me for her "free" giveaways to her friends!