Question

Brett owns and operates a small retail clothing store. His records show $67,000 in sales, with $2,500 in customer returns. His cost of goods sold was $23,000, and he had no other income. What is Brett's gross income on Schedule C (Form 1040)?

Answer 1

Brett's Schedule C gross income = (Sales − Returns − COGS) + Other income.

Net sales = $67,000 − $2,500 = $64,500
Gross profit = $64,500 − $23,000 = $41,500
No other income, so gross income = $41,500.