How do I value inventory at the end of a tax year that is created by myself and cost little to nothing in raw material. Much like an artist that uses natural material. Value is only realized when sold. I do list on Etsy and list the products with a price.
You'll need to sign in or create an account to connect with an expert.
it's not required if you meet the requirements under the current tax law since the Tax Cuts and Jobs Act (TCJA). You can simply enter the expenses under materials and supplies as though had no inventory. You can actually deduct all of your expenses each year for your inventory and are not required to carry over inventory that is not yet sold.
See the information below.
According to TCJA, businesses with gross receipts below $25 million (see inflation adjustments below) are considered eligible to use the cash method of accounting for their inventory.
The choice is yours. For this reason you can list your inventory as materials and supplies each year without carrying an ending inventory amount as long as you meet the gross receipts qualifier. Under the revenue procedure, the gross receipts threshold in IRC Section 448(c) increases from $26 million for taxable years beginning in 2021 to $27 million for taxable years beginning in 2022.
Still have questions?
Make a postDid the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.