Home – New Forums Money matters Is Stock deductable ? Reply To: Is Stock deductable ?

  • Total posts: 20

Hi Lazzo,

The purchase of stock is not a deduction unless the item of stock is sold. The idea behind this is to match the income from the sale of the item of stock to the expenses in brining the stock to sale ie the “Cost of Goods Sold”. The simple formula used to calculate COGS is:

Opening Stock + Purchases – Closing Stock = Deduction

Simply adding business names is not the best strategy to deal with excess profit. There are many strategies to assist in managing tax on excess profits but I would need to have a greater insight into your business and group.

Be sure to contact me on (02) 9957 4033 if you wish to chat further in relation to managing you tax position.

Greg Wilkinson
Bates Cosgrave
Chartered Accountants