Are products purchased for Product Reviews considered a business expense?
I οwn аn LLC thаt mаkеѕ websites. I want tο ѕtаrt a site thаt dοеѕ product reviews. Cаn I write οff thе products I review (tech equipment, game consoles, purses, etc) аѕ business expense?
Yes.
If you resell the items after the review you can only deduct the difference between the buy price and the selling price. Keep ALL of your receipts for at least 3 years.
Yes, but with a couple of caveats.
First off you must be in succession an actual business with the intent of turing a profit. The IRS recognizes that start-ups may take a few years to start turning a profit but if you are continuously showing a loss the IRS will probably rule that your business is really a leisure activity and limit your expenses to whatever income you made.
Following, if you sell the items after the hard and evaluation you must claim the sales price as income. This has the effect of limiting your deduction to the difference between the buy and sale price.
bostonia…’s answer is mostly excellent, but I want to add to both answers above that if you do not sell the products after reviewing them, and instead keep them to make personal use, the IRS may choose that you bought them for that purpose and prohibit the deduction.
As far as I know newspapers, magazines, television companies don’t buy products to review them. Manufacturers send the products for free, and even then it may or may not be reviewed.
What is your business model? How do you intend to earn from this web site?
About the business expense, all previous posters are right.