Talk:Treasury Regulations, Subchapter A, Sec. 1.162-3

From TaxAlmanac

My question is this: If you use paint, screws, bolts, other small parts, metal and glass to create a customized product for your customer; which of the items would be incidental materials and supplies or would they all be "other than incidental"? In other words would you deduct the cost of creating this product for your customer in the year you purchased and paid for the product or the year that the product is actually consumed and sold to the customer? How do you distinguish between incidental and not incidental? Rev. Proc. 2002-28 is helpful on the use of the cash method, but doesn't seem to get down to the nitty gritty of what could be incidental and available for deduction in the year purchased.

I had a much longer explanation with more detail, but lost it due to login expiring. If you read in detail Rev. Proc. 2002-28, particularly Section 2.07 then I think you will see the point of my question.