Hi everyone, ok so here is my situation.

I have a regular job and a small business on the side buying and reselling clothes online. FYI I have an LLC but I know for tax purposes it’s irrelevant.

In 2020 I did things very casually- I didn’t keep track of how much each item cost that I sold. This is because I get things from japan, and so the item names on my receipts of my orders are hard to tell which item is which unless I write it down when buying like I do now. Basically, it’s pretty much impossible to match the COGS to the goods sold. So I’m wondering, is there a way to somehow deduct the COGS? I have a record of all my purchases and the date and amounts, just not which correspond to what I sold.

I thought I could have two options:

1. Eyeball which goods correspond to which charges based on memory and calculate the COGS sold that way.
2. Declare my sales under other income and take the hit from not deducting COGS. I have a lot of other expenses as I started this year, so I wouldn’t feel an extra hit, just a smaller refund.

I figure I’m using the “cash method”. Also, I heard about declaring inventory as non incidental expenses under TCJA but it seems kind of dubious and unclear, any thoughts on that would be great too.

Thanks so much!