@Rhom wrote:
You example is a bit confusing as i believe you added and extra 0 in your original example of the widgets you purchased before the business started.
It's not just confusing, it's an absolute mess written by someone who doesn't even get the basic concept. I'd recommend ignoring the entire post completely.
If you bought inventory in the previous year and started your business on January 1st of the following year, then, generally, the cost of the inventory is your beginning of the year inventory for the purposes of Schedule C. Then you simply add to that figure any purchases during the tax year and subtract your end of year inventory from that total (i.e., beginning of year inventory PLUS purchases MINUS end of year inventory EQUALS cost of goods sold).
