Yes, New Mexico is part of the USA. Although not everyone here
is happy about that they at least understand that it is the case.
The USPS reports that a good deal of mail arrives from other
states with postage affixed sufficient to mail to Mexico, and I have
more that once had to explain to vendor phonereps that it really was a state.
As I said, my point has nothing to do with taxes, much
less tax basis, wash sales, or domicile. It has to do with the generally
accepted accounting principle known as the "matching principle",
which requires that, insofar as is economically justified,
that income items be matched on one hand with the expenses
and capital expenditures that procure them, and on the other,
with the assets ante and post that engender and vest them,
respectively. To adjust the book value of inventory so as
to reflect gain or loss on sales associates
the income item to completely unrelated assets. If the cost
of goods sold be changed on one transaction how can profit
or loss be calculated on the next? The inventory account is
properly credited by the cost of goods sold, not the proceeds.
The difference is profit or loss and it has no business flowing
back to the inventory account unless it is reinvested
in additional inventory!
Perhaps those who disagree should write GTCB and advise them
that they should be adjusting Capitalized Inventory to reflect
margins on dispositions therefrom. Mr. Green surely needs
to know that he's been doing it wrong all this time. With
luck they will be able to find a Belarussian bookkeeper to
get their accounts into proper order.
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