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Posted: Thu Jan 08, 2009 8:01 am Post subject: Closing Business- What do I do with the raw materials? |
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I am closing my business and not sure what to do the the raw materials. I have a lot of fleece, PUL, elastic, etc, used in cloth diaper making. Am I able to still sell off the materials, even after Feb 10th, or will I need to write off the amount of the fabric? I don't want to break any laws by selling the materials. Any suggestions would be appreciated. I am very confused as to whether or not the selling of fabric is still legal as long as I do not market them as for children's products. |
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Shannon Foster Guest
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Posted: Thu Jan 08, 2009 8:39 am Post subject: |
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There is no law against selling material. |
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Christy Guest
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Posted: Thu Jan 08, 2009 8:40 am Post subject: |
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Those fabrics are not specifically child-related... I use many - all - of the ones you mentioned for products made exclusively for adults. I'm guessing you would be fine selling the fabrics, the only ones I would wonder about would be child-themed (Disney, cartoons, etc.) |
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J C Sprowls
Joined: 25 Mar 2006 Posts: 2004
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Posted: Thu Jan 08, 2009 9:39 am Post subject: |
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I don't think there's a business proposition there, either. Consider: all the new crafters coming into the market because they can't clothe their children. And, when they do, they'll be armed with even more misinformation than is running around in cyberspace, currently. I don't foresee the ability to sell off much inventory in that future buying climate.
I may be wrong... but, I think a bonfire would do nicely. We could toast marshmallows, talk about the good ol' days, etc. |
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Valerie Burner Guest
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Posted: Thu Jan 08, 2009 10:32 am Post subject: |
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JC, I hope the marshmallow company has good insurance. When I was a kid (small enough to be bathed in the kitchen sink) we were roasting marshmallows, and my brother turned to me with one flaming on a stick- and stuck it right into my cheek! I got a nasty burn right under my eye! Not to mention the noxious fumes that all that hazardous material will produce... |
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sjpwraz Guest
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Posted: Thu Jan 08, 2009 11:34 am Post subject: Re: Closing Business- What do I do with the raw materials? |
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I would say those materials could also be used for ADULTS, therefore not illegal. I am switching to make ADULT items with my stash. I just hope there aren't to many bonfires or materials ending up in landfills if they are as hazardous as our government believes. |
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J C Sprowls
Joined: 25 Mar 2006 Posts: 2004
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Posted: Thu Jan 08, 2009 12:39 pm Post subject: |
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Even if you make adult clothing, you may still have to test. There's a H.U.G.E. gap in the language - you should consider re-reading the legislation. |
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1001saf Guest
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Posted: Thu Jan 08, 2009 1:49 pm Post subject: |
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So, are we legally able to write off the inventory then if we aren't able to sell it? |
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J C Sprowls
Joined: 25 Mar 2006 Posts: 2004
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Posted: Thu Jan 08, 2009 2:17 pm Post subject: |
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Ooh. You really need a CPA to advise you on that.
There are several accounting methods available to you. But, it ultimately depends on what you plan to do with your business.
If you plan to stay in business, a CPA might determine that it's in your better interest to carry the value of the lost inventory over a couple years (i.e. capitalized expense). However, if you cannot reasonably predict that you will still be conducting business in the next 2-3 years, the advice you receive might be very different. Finally, if you decide to close up shop and dissolve the business, then the loss of inventory would be recorded during the tax period you dissolved the business.
Regardless your individual business decision, this will have a significant impact to the US revenue stream. |
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simpleadditions Guest
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Posted: Thu Jan 08, 2009 4:41 pm Post subject: what to do with material when closing business |
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Well, I'm still making dipes and such for grandkids, nieces, nephews and the like, and there doesn't seem to be legislation about giving them as gifts at baby showers and such, so I'll be doing that too just like I have been. I'm still buying fabrics. Unless and until they legislate gift-giving, I can still do what I do...I just may not make any money at it. |
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J C Sprowls
Joined: 25 Mar 2006 Posts: 2004
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Posted: Thu Jan 08, 2009 5:26 pm Post subject: |
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You should read the legislation, again. You cannot give away or donate product, either - any form of distribution means you are at risk. Like I said: there are H.U.G.E. gaps in the language. |
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Guest
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Posted: Thu Jan 08, 2009 5:51 pm Post subject: |
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The bill is huge, can you provide a link for that - where just giving it to your family counts? |
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J C Sprowls
Joined: 25 Mar 2006 Posts: 2004
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Posted: Thu Jan 08, 2009 7:01 pm Post subject: |
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Nope, I can't. The bill in its entirety can be found on the CPSC website. |
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1001saf Guest
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Posted: Fri Jan 09, 2009 9:09 am Post subject: |
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I guess that would fall under the same category as the thrift stores fall into, gift giving that is. Not required to test each item, but still illegal to resell or gift an item that doesn't meet the new laws. So, if you unknowingly give away or resell an item that has high lead content you are still legally responsible and will receive the fines. I guess the thrift stores will be VERY cautious as to what they will accept in the future, but at least they can stay in business as long as they avoid common lead culprits. Won't see anymore used toys I'm betting. |
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J C Sprowls
Joined: 25 Mar 2006 Posts: 2004
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Posted: Fri Jan 09, 2009 9:22 am Post subject: |
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My point is twofold:
- read the darn thing, and
- notice that the language is too far reaching
I don't know how anyone can say: "this doesn't affect me". It is abundantly clear when they haven't read and attempted to understand the content.
It's a federal law. It affects every person's life and livelihood. |
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