"When does a home business have to declare inventory?"
When you no longer qualify as a small business taxpayer.
https://www.irs.gov/publications/p538#en_US_201809_publink1000270701
Small business taxpayer.
You qualify as a small business taxpayer if you
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Have average annual gross receipts of $25 million or less (indexed for inflation) for the 3 prior tax years, and
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Are not a tax shelter (as defined in section 448(d)(3)).
As a small business taxpayer, you can treat inventory as nonincidental materials and supplies or follow a method of accounting that conforms to your applicable financial statement (if you do not have an AFS, you can account for inventory following your books and records.
