Reporting merchandise costs for Poshmark or Mercari sales

[Nancyzee]

I received a 1099-K for about $2,000 in Poshmark sales. I believe that amount is for gross sales, since my seller's report on Poshmark shows a net payout that's about $500 lower. I assume shipping charges and Poshmark's 20% commission account for the difference. 

I'm filing my taxes using Turbotax Premium, and I'm reporting this 1099-K income on the Schedule C. I don't know how to report the cost to me of the clothes that I'm reselling. Some are thrift shop finds, bought to resell at a small profit, and others are items from my own closet, which sold on Poshmark for a fraction of their original cost. Would the cost of the clothes fall under "Inventory?" Turbotax asks me if the inventory costs were the same at the beginning and end of the tax year. Can anyone shed light on this?

[DMarkM1]

Yes.  You are correct the cost of the clothes that you acquired for resale are inventory costs.  First, be sure you indicated in the inventory interview that you use "cost" to value your inventory.  Next, in the box "Beginning of year inventory value" you will enter the cost of your inventory on 1 Jan 2022.  For the "End of Year value" the cost of your inventory on 31 Dec 2022.  

The check box is asking if there was a difference in your end of year 2021 and beginning of year 2022.  That is very rare to have different inventory on last day of prior year to first day of current year.  So just leave the box blank.

On the next page you can enter the costs of purchases throughout the year and any other costs associated with the inventory as noted there.