You can consider this product "Shrinkage" which is an account that increases Cost of Goods Sold. Under this result, you would be reporting a higher expense for throwing out your product on your tax return. To do this: log into TurboTax Online:
> Choose your return for the year
> Under the "Find" magnifying glass, search "Business or Professional Activities" and click it.
> You will then choose your business, and click the "edit" button beside the one in question.
> Choose "Income and Inventory", then "Skip Income"
> Then you will be in the Inventory section. You will add the cost of all useless product and have two choices in how you can go about it.
1 - You can put the total cost as a difference between beginning inventory and ending inventory.
2 - You can simply put the total cost in "Other Costs".
Make sure to click "Continue" so that your information is saved. For more information, check out: Canada Revenue Agency - Inventory and Cost of Goods Sold
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