<prompt> Human: Hi all:I have a tax question that I hope you might know the answer to, or point me in the right direction to information that could. In 2016 my wife started an MLM and bought inventory. She made sales but the not enough to cover her initial investment. She quit this year and is selling her inventory wholesale or slightly below. My question is: can she take a loss on the layout for inventory in 2016, minus sales? Or does the value of inventory carry over? Maybe this is a question for an accountant but I was hoping to start here because the value is relatively insignificant.  <response>: Most people involved in pyramid schemes file a 1040 Schedule C, which allows them to write off business losses. 