@ThomasM125 Do you have a recommendation between these 3 options to report purchased/sold inventory?
1) Include under COGS section as "Purchases" with 0 beginning and 0 ending inventory balance
2) Include under COGS section as "Materials and Supplies" with 0 beginning and 0 ending inventory balance
3) Include under Other Expenses/Misc. Expenses as "Non-Incidental Materials & Supplies (TCJA)"
Since the items I purchase for resale are finished products (for example, trinkets), it seems to make the most sense to include under "Purchases" (option 1 above), but the tax code language seems to suggest that inventory should be reported as "Materials and Supplies" ("If you choose not to keep an inventory, you won't be treated as failing to clearly reflect income if your method of accounting for inventory treats inventory as non-incidental materials or supplies"). Does this mean option 2 or 3 above is more suitable?
Also, it sounds like I can either report only purchases that actually SOLD or all purchases regardless of sold/unsold (per @DianeW777 above given TCJA)? So for example, if I purchased $10 in products in 2024 and sold $5 in 2024, and decide to go with option 1 above, I could report either:
A) $5 under "Purchases", $0 beginning and $0 ending inventory (reflecting only what was sold)
B) $10 under "Purchases", $0 beginning and $0 ending inventory (reflecting all purchases regardless of sold/unsold)
Is this accurate? I plan to select "cash" for accounting method and prefer not to keep an inventory but can determine COGS based on what was sold for the year.
