I asked this question on another WAHM group I belong to but didn't get many responses, so I'll try here.

What are the tax consequences for doing co-ops (like for fabrics and notions)? Do you report this on your Schedule C somewhere? I'm concerned because co-op payments would be in my Paypal accounts mixed in with sales receipts, kwim? If I didn't report the co-op receipts I'd be worried about how that would look if I were to get audited.

I did a very small co-op last year and this is where I reported it:

I put the receipts as "Other Income" on line 6, and put the cost of the co-oped goods somewhere as an Expense (can't remember off-hand and I've already filed away my return).

How do you do it? And if you co-op but you don't report in on your Schedule C, what is your rationale?

TIA

I am doing my taxes too... :)

Hmmm, I would think that you treat the purchases and expenses the same as you would treat inventory purchases and customer sales. Even though it is a co-op in nature, you are still buying and selling.

I think you did right by reporting it. Though I have not run a co-op, I have purchased from co-ops, and all my receipts from those purchases, I have filed under "Inventory".

Then again, this is my first year in business and when I file it I hope my tax person can correct me.

I don't know if I helped any LOL...

But...good thread!

Where's Sherrie!? She is the co-op queen!

SHERRIE!!!

I treat it just like I do any other inventory. I still buy something and sell it, right? That's the way I have always done it. It helps to reduce the tax liability.