@SoLostHELP at this point, my suggesting is that you let that sleeping dog lie. Wake it, and it may turn into a gremlin. That doesn't mean it still can't happen. But with all that's going on in the world today, I'd leave well enough alone. Here's a few things I note though.
I never added the new inventory purchased since 2010!!
Don't bother adding it now. If it was never added, that means it was never expensed or sold. In other words, it never existed in your business. At this point, there's no need to go back in time to make it exist, as doing so will not make any difference to your tax liability for any of those other years anyway.
Remember, part of closing a business is that you get your EOY Inventory balance to zero. With unsold inventory, the only way to do that is to show it as "removed for personal use" which means what you paid for it is not tax deductible anyway. So it makes no sense at this point to add it to your inventory balance, when all you're going to do is turn right back around a remove it for personal use.
So in a nutshell, you can consider that inventory you purhcased in 2010 as having been purchased by you personally, for you personally, and has nothing to do with the business.
Can I depreciate the value of my remaining inventory
Inventory is never depreciated. No exceptions. Remember, depreciation is not a permanent deduction. When you close a business all prior depreication is recaptured and taxed. Also, what you pay for inventory is not deductible until the tax year you actually sell that inventory. Doesn't matter what year you purchased it either.
or would I get more deduction if I donate it?
Your donation would be a personal donation, having nothing what-so-ever to do with the business. Remember, in order to claim a deduction for a donation, you must donate to a qualified charity recognized as such by the IRS. Your donation would be reported/claimed under the Deductions & Credits tab in the Charitable Donations section. The value of your donation is the lesser of it's FMV or what "you" actually paid for it; whichever is LOWER.
Keep in mind also that you have two basic classes of qualified charities. there's 50% charities and 30% charities. That basically means if you donate to a 50% charity, then only a maximum of 50% of what you donate is deductible from your taxable income. Ditto for a 30% charity. Also, the allowed deduction could be less than 50% (or 30% if applicable) if your income is to high. I don't know what the income thresholds are.
I'm pretty sure the TurboTax program treats all charitable donations as a 50%.
Finally, charitable donations are an itemized deduction. So until the total of all of your itemized deductions exceed your standard deduction, it makes absolutely no difference to your total tax liability.
