Can I deduct Facebook Marketplace inventory for resale?

Generally, yes — if you buy items on Facebook Marketplace to resell in a business, those inventory costs are usually recovered through cost of goods sold (COGS), not deducted immediately as a normal expense.

How it usually works

• You do not usually deduct inventory when you buy it.
• Instead, you include the purchase cost in inventory, and it becomes part of COGS when the item is sold.
• Example: if you buy a camera for $100 and later sell it, that $100 is generally recovered when you figure COGS for the year of sale.

Records to keep

Because Marketplace purchases can be informal, keep as much proof as you can, such as:

• screenshots or saved copies of the listing
• messages showing the agreed price
• proof of payment (bank, card, PayPal, Venmo, Cash App, etc.)
• an inventory log with purchase date, item description, cost, and sale date

The IRS does not require only one specific form of receipt in every case, but you should keep credible records that support the business purchase.

Possible small-business exceptions

Some smaller businesses may qualify for simplified inventory rules or cash-method treatment, but the exact rules depend on your facts and the current IRS gross-receipts thresholds. Those thresholds can change, so verify the current limit before relying on it.

Bottom line

If the Facebook Marketplace items are genuinely bought for resale in your business, the cost is usually recoverable as COGS/inventory cost — but the exact treatment depends on your accounting method and tax situation.

For a filing decision, it’s smart to confirm the current rules with a CPA or tax professional.