Can I write-off inventory sourcing expenses that are paid with cash to non-businesses?

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Most of my sourcing purchases are paid with cash or e-transfer for buying on online marketplaces like facebook or kijiji, so I want to know what evidence I would need to prove these purchases if I were ever audited. Thank you.

I am a reseller by the way.

1 Answer

score 0 · Answer 1 · 2025-11-27T20:39:16+00:00

Hi N,

Great question — and it’s an important one for anyone sourcing inventory from Facebook Marketplace, Kijiji, or similar platforms.

Does CRA require receipts?

CRA requires you to keep source documents for every business expense. But “source documents” are defined very broadly. They are not limited to formal store receipts.

CRA states that acceptable documentation includes:

sales or purchase invoices
receipts
agreements of purchase and sale
bank / e-transfer records
deposit slips
cheques
and other vouchers or correspondence that support the expenditure

Because informal sellers often can’t provide a formal receipt, CRA allows other reasonable evidence — as long as your documentation clearly supports the amount you are deducting.

What you should keep for Marketplace/Kijiji purchases

To safely deduct these sourcing costs, keep as many of the following as possible:

1. Proof of payment

E-transfer confirmations or bank statements
For cash: bank withdrawal slip + message thread confirming the purchase

2. Listing & messages

Screenshot of the online listing (price, description, seller name)
Chat history showing the agreed price and date

3. A simple written receipt (ideal, even if handwritten)

Example:
“Received $80 from N for used Nintendo Switch – Jan 15, 2026. – Alex P.”
This counts as a valid “receipt or other voucher.”

4. Your own purchase log
Maintain a spreadsheet with:

date
item purchased
amount paid
seller name or profile
payment method
screenshots attached

CRA accepts contemporaneous logs as supporting documents, especially for informal transactions.

5. Photo of the item

Before reselling, take a photo. This helps CRA connect the purchase to your inventory.

Can CRA deny expenses without a traditional receipt?

They can deny deductions if your documentation is weak, inconsistent, or incomplete.
But they will generally accept these expenses if your records are:

organized
consistent
supported by reasonable evidence
tied to actual resale activity

For resellers, this is completely normal — CRA sees this all the time.

Bottom line

Yes, you can deduct these sourcing costs.
Just build a credible paper trail using the items above. The stronger and more organized your evidence, the more likely CRA will accept the expenses in an audit.

Hope this helps!

Can I write-off inventory sourcing expenses that are paid with cash to non-businesses?

1 Answer

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