Business expense - cost of goods sold

Mo__ · ‎March 13, 2020

Quick question, if I buy inventory at the end of the year and is being used in next year, so I show that entire cost of inventory at one time or do I only show cost of goods sold as it's sold.

MinhT1 · ‎March 13, 2020

Cost of goods sold is counted only when the goods are sold. It is a calculation. COGS = Beginning inventory + Purchases - Ending inventory.

Any goods left unsold at the end of the year is counted as Ending inventory (at cost price).

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Mo__ · ‎March 14, 2020

Does the ending inventory get reported on the tax form?

RobertG · ‎March 14, 2020

Yes, ending inventory goes on Schedule C line 41.

The cost of goods sold calculation is shown on lines 33-42 of Schedule C. Cost of goods sold is shown on line 4 as well.

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Business expense - cost of goods sold

Deductions & credits

Deductions & credits

Deductions & credits