Let's make sure we are clear on the terms  ... inventory is not an asset ... you did not sell an asset you sold off your inventory.   The sale of the inventory is reported as ordinary income on the Sch C  and not as a sale of an asset on the form 4797.  

Let's simplify what the others are trying to say here.

The inventory is included in the sale I presume. I also assume that when you say $1M in inventory, that $1M is what ***YOU*** paid for the inventory.

So the first thing you will do is deal with the inventory to get your EOY balance to zero. In the COGS section you will show that you sold that inventory "at cost" for $1M.  That gets your EOY inventory balance to zero with no taxable income from the inventory. Then subtract $1M from your business sales price and that's what you sold the business for.

@Hanko1 

Did you even complete a form 8594 for you and the buyer ... if not  and you sold more than just the inventory you may wish to seek some local professional assistance. https://www.irs.gov/pub/irs-pdf/f8594.pdf

Thanks.  This resolved my question.