I need to understand the requirement to close a my small business that carries inventory. I file a Schedule C

joan1 — Mon, 03 Jun 2019 20:24:36 GMT

I have inventory in a business that I am the sole proprieter and did no business in 2016 and wish to discontinue the business. All inventory is at risk as reported on schedule c in the past. What do I need to do?

Here's how to close you business correctly. Handling the...

MichaelDC — Mon, 03 Jun 2019 20:24:37 GMT

Here's how to close you business correctly. Handling the inventory is half way down in italics.

TurboTax will ask you if you disposed of your business during the year. If you closed your business just by stopping operations, there is nothing else to do for your income tax return.

However, if you sold the business to someone else, TurboTax will guide you through the disposition process and include the transaction on your income tax return.

To get back to your business to do that:

· Type “Schedule C” in the Search box.

· Select the “Jump to” link.

Things get a little more complicated if your business involves assets, or large purchases for the business.

Even if you dispose of the business in a single sale to one buyer, the IRS requires you to separately determine the value of each asset—furniture, fixtures, equipment—so that each is treated properly for tax purposes.

Determining the assets’ market value allows you to calculate whether there is a taxable gain or loss in each case. TurboTax allows you to easily do this:

· With your return open, search for this exact phrase: business (schedule c) (include the parentheses)

· click the "Jump to" link in the search results.

In Business Profile, select to edit "sold business in current year" and select the option for "I sold (or disposed of) my business in 2016". Then select NO and click Continue. Click Continue again.

Now work through "Inventory/Cost of Goods Sold" or product that you had for sale. If your end of year balance is not zero, then you must zero it out by indicating that you removed all inventory for personal use or sold it.

If you claimed "any" vehicle expenses at any time for any year(s) you had this business, then you must work through the Vehicle Expenses section to indicate that you removed all vehicles used from this business to personal use.

Finally , work through Business Assets. You must work through them one at a time and indicate the disposition of that asset by checking the box next to "The item was sold, retired, ...". (See the attached screenshot below. Click to enlarge.)

Follow along the interview.

On the "Enter Asset Sale Information" screen, enter the Sales Price. (See the attached screenshot below. Click to enlarge.)

Only once you've accounted for the disposition of all assets, vehicles, unsold product, and claimed all taxable income of the business (if there was any in 2016), the profit or loss of each will be automatically transferred to the correct forms for you.

topic I need to understand the requirement to close a my small business that carries inventory. I file a Schedule C in Business & farm

I need to understand the requirement to close a my small business that carries inventory. I file a Schedule C

Here's how to close you business correctly. Handling the...