business tax

[Duanebalbright]

I have excess inventory from a business I closed this year. I sold the inventory at a loss, do I have to claim this as income?

[Kelly Thomas C]

The sale of the inventory will increase revenues. And your COGS will be whatever price you purchased this inventory. The difference between sales price and purchase price will be either a gain or loss. For example, if you sold at $10 per unit, and purchased them at $12, then your loss will be $2 per unit. So, to answer your question, yes, you do have record the sale as income ($10), but the cost would have been $12, so you would recognize a loss. Your inventory tracking method will have an impact on the tax impact of this.

I hope this is helpful.

Good luck

Kelly C.

CPA