Inventory Reporting Question

Forum|Forum|5 years ago
April 11, 2021
2 replies
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Our business had never met the threshold where you had to report inventory. 2020 however was different. My question is given that we had not reported in 2019 what should I fill in as our beginning number for 2020? Just don't want to create a discrepancy.

TurboTax Home & Biz Windows

ColeenD3

Level 15

Your beginning inventory is the cost of goods you had on hand. It can't be zero because the purchases were made prior to 2020.

thereddoorAuthor

Level 2

Thank you for the response and your time @ColeenD3 . One quick follow up if I could. Given that we did not report inventory in 2019 will that not create a discrepancy between our 2019 and 2020 returns? If so how do I solve this?

Turbo Tax seems to indicate that the our ending 2019 and beginning 2020 need to match.

ColeenD3

Level 15

It may or may not. If you get a letter, just explain the reasoning. Not everything can be done cleanly on the tax return.