Calc COGS: Can Previous Yr "Purchases Withdrawn for Personal Use" be converted to Current Year Business Purchases?

During past years we always remove "Purchases Withdrawn for Personal Use", as instructed, to calculate COGS. In 2020, we took many of these items from Personal Use and sold them (due to low inventory from Covid). As a result, our COGS is actually greater than our 2020 Purchases. Can we now count this inventory (previously reported as withdrawn for personal use) as a 2020 Purchase, even though these items were bought in previous years? (If it helps, the items in question are books)

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1 Best answer

Level 10

Jan 27, 2021 12:29:30 PM

Yes, you can put your books withdrawn for personal use back into your inventory. Here are the steps to follow in TurboTax Online Self-Employed

Go to Federal on the right panel.
Select Income and Expenses at the top of the page
Click Edit/Add to the right of Self-employment Income and expenses
Click Edit to the right of your business name
Under Add income for this work, Expenses, Edit Inventory Select Yes, I have inventory to report and Continue
Answer Did you use cost method to value inventory?
Enter beginning and ending inventory (Beginning should match 2019 ending inventory) and Continue
Now complete the Cost of Goods questions and Continue

This will bring up you business gross profit and you will see the change in your refund or amount owed.

carlaRD

Level 12

Jan 23, 2021 11:02:39 AM

Same way you withdrew them for personal use you add them as purchases during the year they were put back into your inventory.