posted on February 22, 2001 10:25:17 AM
It's tax time again (ugh), and time to deal with inventory questions/problems. This is the first year that I've actually had any inventory to speak of, and I'm having trouble valuing it for tax purposes...and also for my own purpose of knowing how well I really am doing.
For those of you who buy smaller collectibles in bulk, how do you assign a value to individual pieces, so that when you resell them you actually know how much you made?
For example, you buy a box full of glassware at a garage sale for $5.00. Individually, the pieces might sell for 50 cents up to $50. The "box value" is $5.00...but what is the individual value? I've torn my hair out over this one, and the best I can figure is to divide the value of the box by however many pieces, as a starting cost. If there were ten pieces in the box and I paid $5, the "cost" of each piece is 50 cents.
My tax guy thinks I ought to be able to do a better approximation of beginning cost than this...apportioning the $5.00 less equally, and applying more of it to the clearly more valuable pieces. I say this would take me the rest of my natural life and frequently does not even approximate what an individual piece would sell for. Some stuff I thought was pure junk has netted me extraordinary prices. Some of the items I bought BECAUSE I thought they would sell for a high price, turned out to be losers.
So...how do you more experienced sellers handle this type of inventory problem? I'd appreciate any input.
