Deductions & credits

Can you check Part III of your Schedule C?

 

Your 2019 year end inventory of $5,536 should have carried over as your beginning inventory for the 2020 tax year.

 

It appears what may have happened is that you did not enter your 2020 year end inventory (which should also be $5,536 if you made no sales and had no purchases). If you did not enter a 2020 end of year figure for inventory, the $5,536 would have carried down to COGS, which would be inaccurate.