2007-07-02 15:55:13 · 4 answers · asked by angel_rat_83 1 in Business & Finance ➔ Taxes ➔ United States
Depends on deflation or inflation. If prices are falling no; if prices are rising yes.
2007-07-02 16:45:33 · answer #1 · answered by ALBPACE 4 · 0⤊ 0⤋
Last in first out method usually "saves" you in taxes. But in the long run it really doesn't since your inventory becomes cost of goods sold anyway, sooner or later. Oh, by the way, if you are changing method of accounting inventory, you have to tell IRS and pick up tax on capital gain from changing if you incurred. I think the whole fuss doesn't change the bottom line, it's only small timing difference. Remember: there are 2 sure things in our life: death and taxes(don't remember sho said)
2007-07-03 05:00:45 · answer #2 · answered by alikmal 2 · 0⤊ 0⤋
No.
If your inventory is falling in price, LIFO will value your on hand inventory higher and your cost of goods sold lower.
2007-07-02 15:59:49 · answer #3 · answered by Wayne Z 7 · 0⤊ 1⤋
Only if your inventory costs are rising.
2007-07-02 17:11:12 · answer #4 · answered by Bostonian In MO 7 · 0⤊ 0⤋