I buy merchandise for a low price and sell at a higher price, what kind of expense is the merchandise?

Question

Is it an asset expense? An inventory expense? Is it tax deductible?

Answer 1

This kind of expense is labeled "Cost of Goods Sold" after you've sold it, and "inventory" before it's been sold. Assuming your business is a Sole Proprietorship (meaning you own it yourself, as opposed to a Partnership or Corporation) you should file a Schedule C with your 1040 at the end of the year. The money you spent on inventory is deducted from your sales for the year, and you pay income tax on the sales. In that way, it is tax deductible.

Answer 2

This would be considered an inventory expense and would be tax deductible as long as you have the proper paperwork completed to be considered a "business".

Answer 3

No it is not an expense and it is not tax deductible either....
It is the goods you use in your business or your capital...