Biz gifts

[tloonya]

Hey!
I am seeing my accountant today.
YES! I have one!!!

I want to know how should I take care of the following.
We have products that we give out as gifts with certain purchase amount.
I want to know if we can write it off and how do we prove that this is how many we give out.

Thanks

[cronewitch]

Code it to promotion and you don't need to account for the items.

If you for example purchased 1,000 cloth shopping bags for $900 and gave one to each person you felt like giving one to the entire order is promotional expense.

[thyme4change]

Promotional materials are expensed when you purchase them. After that, you can do whatever you want with them - give them to customers or put them in the store room, or send them to Goodwill, or hand them out at an event. You don't have to prove anything.

If, however, you want to give out some regular inventory as free goods to reward customers, you would recognize it as a sale for $0, and take the cost of the inventory on the COGS line. This method will reduce your margin.

[tloonya]

Thanks you all.