Client Questions – Can I Deduct My Spoiled Inventory?

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Dead flowersQuestion: A florist called our office this week asking if she can deduct the cost of flowers that didn’t sell by Valentine's Day. I also get this question often from restaurant owners.

Answer: Since flowers and food have a short shelf life, it is very rarely held in inventory. Normally the business owner deducts the cost of the flowers or food when they are purchased. Accordingly, they cannot be deducted again when they are thrown out.

Larger retailers, wholesalers, or manufacturers who have an inventory on their tax return will get a deduction when they write items of inventory off as worthless.

Like any good CPA, I need to add a disclaimer: Unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.