Chapter 6 hotel rooms De KoogHow To Figure Cost of Goods Sold If you make or buy goods to sell, you can deduct the cost of goodssold from your gross receipts on Schedule C. However, to determinethese costs, you must value your inventory at the beginning and end ofeach tax year. This chapter applies to you if you are a manufacturer, wholesaler,or retailer, or if you are engaged in any business that makes, buys,or sells goods to produce income. This chapter does not apply topersonal service businesses, such as those of doctors, lawyers,carpenters, and painters. However, if those working in personalservice businesses also sell or charge for the materials and suppliesthat are normally used in their businesses, this chapter applies tothem. Inventories Schedule C Lines 35 - 42