RE: IRS Form 1125-A Cost of Goods Sold.
A bookkeeping client primarily sells rare coins inventory and uses the accrual accounting method for their small LLC with $150k in sales. So it seems reasonable to file taxes with accrual financial reports. However, the IRS Form 1125-A Cost of Goods Sold does not allow accrued COGS to be matched against 2024 sales. I don't get it. The form's formula completely misrepresents and miscalculates a much lower COGS - so their taxability is increased. Bottom line - I am looking for someone to explain why we can't use accrued COGS, and/or what are better options.
Thanks!
