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dannychilds87
New Member

Inventory Purchased with Business Income

My wife started a business in August. She is selling clothing on Facebook. Any money she made, she would turn around and purchase more inventory. She didn't keep any of it for herself. Does she take a loss for the year? Right now, she is being taxed on her gross profit (total sales - cost of goods sold). Turbo Tax isn't including her all of her purchases as part of Cost of Goods Sold.
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Accepted Solutions
KarenL2
Level 5

Inventory Purchased with Business Income

She may not have a loss for the year if she had a lot of inventory leftover at the end of the year.  If she carries inventory, the deduction for those purchases is calculated in the year the inventory is sold.  Make sure you entered the correct Ending Inventory Value to get an accurate number. 

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1 Reply
KarenL2
Level 5

Inventory Purchased with Business Income

She may not have a loss for the year if she had a lot of inventory leftover at the end of the year.  If she carries inventory, the deduction for those purchases is calculated in the year the inventory is sold.  Make sure you entered the correct Ending Inventory Value to get an accurate number. 

View solution in original post

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