The profit/loss calculation has no bearing on where you live or how inventory is treated or where the sales took place. Location only affects the tax rate and who you pay it to. The profit, $5K in this example, never changes. That's assuming the sales expenses were legitimate (i.e. didn't personally fly to Hawaii to hand-deliver the card). Inventory rules only typically affects rotating inventory stock of homogeneous product. We can assume he knows how much was paid for each card.
Last edited by egbeachley; 04-13-2016 at 06:50 PM.
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