Should zakaah on commercial goods be based on the price for which they are bought or the price for which they are to be sold?

The way in which the zakaah on trade goods is worked out is
based on their market value (which is usually the price for which they are
sold in the store) after one full year has passed, whether this price is
equal to the price paid for them or it is more or less. Then zakaah should
be paid at the rate of one-quarter of one-tenth (i.e., 2.5%). (Risaalah
fi’l_Zakaah by Shaykh Ibn Baaz, p. 11; Risaalah fi’l-Zakaah al-‘Aqaar
by Shaykh Bakr Abu Zayd, p. 8). 

This is perfectly just,
because its value after one year has passed may differ from the price for
which it was bought; it may be more or less. 

If the businessman is one who sells wholesale, then he should
base his zakaah on the wholesale price, and if he is one who sells retail,
then he should base his zakaah on the retail price. Al-Sharh al-Mumti’,
6/146. 

If he sells both wholesale and retail, then he should strive
to work out the amount of goods he sells wholesale and the amount he sells
retail, and pay his zakaah accordingly. If he errs on the side of caution
and pays more than he owes, that is preferable, because he may think that he will sell these items wholesale and then sell them retail. 

And Allaah knows best. May Allaah bless our Prophet Muhammad and grant him peace.