Single Member LLC Schedule C

[RelovedRelics]

How do I document the value of inventory that I inherited on the Schedule C? I run a small business (a single member LLC) that resells used merchandise online and at flea markets/craft fairs/antique malls. My grandparents and my mother in-law both passed away and since I sell “junk” my family gave me a very large amount of stuff to resell. I don’t know how to document the value of this acquired inventory. As of right now my schedule C looks like I generated $100k in revenue from a previously nonexistent inventory of products. 

[AmeliesUncle]

On the date of their death, how much could have you sold it online or at flea markets/craft fairs/antique malls?  That is the amount to use.  If the value of the item did not change much after their death, most likely you will have little or no profit (actually, probably a loss due to other valid business expenses).

[RelovedRelics]

Sorry, can you explain this to me like I’m completely dumb? Because I don’t understand how if my beginning of year inventory value is only $6k and I end the year with $16k worth of inventory and accumulated $142k in revenue, but I have $0 in purchases of inventory, how is that not going to raise huge red flags to the IRS? 

[AmeliesUncle]

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@RelovedRelics wrote:

 I have $0 in purchases of inventory

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For purchases, enter the total Fair Market Value (at the date of death) of all of the items you inherited.