disposition of business inventory

Forum|Forum|5 years ago
November 13, 2020
2 replies
4 views

when asked on the sch C (retail clothing sales) disposition: sale of business

line 3 date acquired How do I determine what date to use for inventory that has been purchased over the course of 10 years? Also on line 6 asking for the cost of inventory , how do I know what that amount is?

Please Help....

TurboTax Self Employed Online

Critter-3

Level 15

Do you file a Sch C ? If so did you expense all the inventory costs or have you been keeping it separate as COGS ?

What form are you trying to fill in ? What is line 3?

OMG821Author

Level 2

hello, and thank you for repling to my question...

so Yes to the sch C …and I think I have been keeping it separate as COGS.

form was the sch C (retail clothing sales) disposition worksheet

Disposition sale of Business

it was or the inventory it asked for date acquired, date sold, cost or basis, sales expense and sales price.

Critter-3

Level 15

First I really think you need to talk to a local tax pro and or attorney so you get the business sold correctly ... but for the inventory look at the Sch C ... either you were using the COGS section on page 2 or you were not.

Read the form and instructions for form 8594...

https://www.irs.gov/forms-pubs/about-form-8594

Carl

Level 11

If you closed your business in 2019 and still had inventory and assuming you were using COGS, then you simply report all remaining unsold inventory as "removed for personal use" and that's it. You're done with the inventory part.

If you did not use COGS but instead expensed the inventory, then for any left over and unsold inventory you must subtract what you paid for that inventory from your business expenses. It's not deductible if you did not sell it, donate it or otherwise dispose of it by some other means other than removing it from the business for personal use.