Extra Products Added to Inventory

[amowrey715]

This is my 2nd year of my business. Last year when I filed I started with a zero beginning inventory and ended with a small inventory. My understanding is that my Schedule C for this year needs to have the exact beginning inventory that I had as my ending inventory last year.

However, my company has provided me with free product throughout the year for meeting certain milestones and those products have been added to my inventory throughout the year. Where do these products land among my numbers when filling out my schedule C? Do I add them into my purchase amount? Adjust my beginning inventory? Don't put them anywhere?

Some of those products are still in my inventory so they are now included as part of this year's ending inventory.

[ColeenD3]

You would add the products given to you as purchases with zero cost. You would not change beginning inventory. Whatever inventory you had on December 31 is the same on January 1.

Don't consider it as separate from inventory you purchase. The only difference is that you got it for free.

[Critter-3]

If you got  free product then it is not entered anywhere on the Sch C since it has no cost basis.   If you sell it then you have income to report but no reduction in cost basis again since it has no cost.