Investor inventory

Since this isn't your business, you would not report this is cost of goods sold. This is an investment and not a business so you would report this as an investment. Here is how to report.

1. Log in or open your Turbo Tax Return.
2. Select Federal
3. Wages and income
4.  Scroll down the screen until to come to the section “Investment Income”
5. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section)
6. The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
7. Since you did not receive a 1099-B, answer “no” to the 1099-B question
8. Choose type of investment you sold - select everything else
9. Some basic information:
   1. Description –  Usually the address of the property sold
   2. Sales Proceeds – Net proceeds from the sale. Here you will list $20,000
   3. Date Sold – You can list 12/31/2023 as date sold since the cars were sold periodically throughout the year
   4. For the date purchased, you may enter the date you made the investment.
   5. For the cost or other basis, enter $50,000
10. Finish out the section.

Now, how this works is that you will receive a capital loss this year of -$30,000. For this year, you will be allowed to claim a $3000 for this year and the rest ($27,000) will be a carryover on your return to offset future capital gains income. 

Next year if more cars are sold, you will report in this same manner except you will enter 0 as a cost basis since the basis amount is reported this year. The amount sold is still reported as a sales proceed but your carryover loss should negate some if not all the capital gains generated on next year's return.  

If the sales of your cars you invested exceed $27,000 for this year (2024), then you will pay income tax on capital gains that exceed that amount as well as any future sales beyond once the carryover loss is exhausted.