You will "invest" the inventory into the business and should use the lower of the current market price or original cost to value it. For your documentation, you should list all the items with their current market value and your original cost. Then note which is lower and use that to total up the value of your inventory. For your bookkeeping, this will be an increase to inventory and an increase to equity. If you started your LLC in 2022 and chose to have your inventory available to the business all year, you will show the inventory investment as the beginning balance.
For tax purposes, if you are filing as a single-member LLC on a Schedule C of your personal 1040 return, you will enter your inventory creation by following these steps:
- Within your tax return, go to your self-employed income or use the magnifying glass to search for Schedule C and click Jump to schedule c.
- On the Your 2022 self-employed work summary page click Edit.
- Scroll down to Inventory and click Start.
- Answer the remaining questions regarding beginning/ending balances and current-year expenditures.
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