I sold my inventory back to Mary kay. I took a loss of 10%. I don’t know where I’m supposed to plug that information into. I have 0 inventory as of this year.

[Helpinghand11]

I sold my inventory back to Mary kay. It gave me 90% back so I took a loss of 10% on everything I purchased. Do I need to include the amount I was returned on my taxes. I didn’t make a sale or profit so I didn’t want to include that in sales? I don’t know where I’m supposed to plug that information into. I have 0 inventory as of this year.

[ThomasM125]

Yes, you have to report the proceeds from selling your inventory back to the supplier.

When you purchased the products you took a deduction for that when you bought them, unless you report inventory on your tax return at the end of the year. In that case, the cost of the goods purchased would be held in the inventory and not yet deducted. 

Since you sold all of your products, you have no inventory at the end of the current year. So, if you reported inventory on your tax return at the end of the previous year, that will be deducted in the current year when your inventory is reduced to $0. So you report the sales proceeds as you will or have deducted the cost of them. 

If you didn't record any inventory, then you deducted the full cost of the goods you sold back to Mary Kay already as purchases, so there in no additional deduction you can take. In other words, you deduct the cost of the goods when you buy them as purchases, or when you reduce the inventory to $0, as that offset goes to purchases. So the deduction for the products should already be reflected in your purchases, so you have to report the sale of them to offset the deduction.

[Helpinghand11]

I do record inventory at the end of the year.

I didn’t make any profit selling back the inventory they buy it back 90% of total. This means everything they buy back I take a 10% loss on every single item. 

theres 5 categories and im just so confused do I include the buy back total under personal use? It’s not a sale because it actually was a loss to me on each item I paid for. You buy the products upfront if you sell them back you lose 10% of what you paid. 

[DaveF1006]

 It depends.  Did you have any sales and did you report these in Schedule C?  If so, let's break this down.  Assuming  If you haven't sold any products during the year and then Mary Kay buys back your products at 90% of its value, it's a sale.  

Let's assume you purchased $40,000 worth of inventory and have no inventory at the end of the year. You would record $36,000 as a sale in Schedule C because this is 90% of your inventory that was bought back.

Now go to cost of goods sold. Record your beginning inventory at $40,000 and ending inventory as zero. What is reported in your Schedule C is a business loss for the 10% value of the inventory that wasn't reimbursed to you.

This is an oversimplification that I have stated because you may have other income that was reported in your Schedule C. The point is, however, that the loss of the value of your inventory is reflected as a loss in your Schedule C.