Yes, you should enter the final inventory as 0, even if that results in a loss of over $700. Also, since you are closing your business this year, you need to report your business and continue the entries as if you were reporting income and expenses from your business. TurboTax will ask you for more information about your business, because there are some situations that could still affect your return this year. Some of those could be if you sold your business, or if you had business property that you disposed of.
When you edit this prompt, TurboTax will ask if you stopped your business, and will ask for more information on how to closed the business. You will still have to go through the interview process for the business. The program will ask about income and expenses, and about any assets that the business had.
For more information visit the following links for both IRS and TurboTax information on closing a business:
