Question For Those Who Manufactor And Use Their Own Product.

[Brophy]

I would like the opinions from those who do this as a buisness and those who sell on the side as a hobby.  I know there are many discussions on this subject, but I have not seen this one.

 

Do you sell the product to yourself or just use from your inventory?  How does this work for taxes? 

 

 

[texacan84]

I manufacture soft plastic baits and I also use them, but mostly do it for a hobby. However i do sell them on the occasion someone wants them. I don't sell to myself because I set aside enough for me to use. As far as reporting taxes on what I sell, it's hard for me to justify reporting 60 bucks for the year and half of that goes to my sons high school bass team.

[Skeeter]

Unless you are selling to buisnesses, just put the money in the gas tank of your boat.

 

Skeeter

[saltwater]

It costs me more in time to make a lure than I could ever sell it for. I can't compete with a manucacturing corporation that can build, package and distribute a lure and sell it for $1.99. I give most of my lures to family and friends, the rest I use for the joy and satisfaction of catching fish on a lure that I made.

[BobP]

The IRS wants to tax your profits.  In the case of an excise tax, they want to tax every product you sell regardless of profit/loss.  That's SELL, not MAKE.  If you make a product and use it yourself, it isn't a product and is never sold - it's a private hobby item or a test product.  Same deal if you make it and donate it to someone free of charge.  You might consider these transactions as product testing expense and advertising expense respectively if you are running a business.  Since you never sell them, I don't think the excise tax applies.

[fishon-son]

what taxes  I give it to friends and family..they all just enjoy it  I get gift cards all the time to buy more product to make more..its just fun for me to watch them catch big bass on my stuff...im the talk of the family...all want to know what im coming up with next...you got to be a big bs er...

[Brophy]

The IRS wants to tax your profits.  In the case of an excise tax, they want to tax every product you sell regardless of profit/loss.  That's SELL, not MAKE.  If you make a product and use it yourself, it isn't a product and is never sold - it's a private hobby item or a test product.  Same deal if you make it and donate it to someone free of charge.  You might consider these transactions as product testing expense and advertising expense respectively if you are running a business.  Since you never sell them, I don't think the excise tax applies.

 

Thanks, that is the type of answer I was looking for.

[toadfrog]

You use what baits you want and that comes under loss strayed stolen or damaged product . Certainly hope the damage comes from fish .