Used car dealership taxes

[stech]

We earned $3000 profit from selling cars. Do I enter that in 1a or prepare a 1125a? (Beginning inventory: $15, COGS $12, purchase: $0, what would be my ending inventory?

[tagteam]

Is this your business (selling used cars)?

Are you preparing a business tax return (e.g., partnership/LLC, corporation) with TurboTax Business? 

EOY inventory would have to be $3 based on your facts.

[stech]

yes, selling used cars, preparing 1120

I think my EOY would be $4000.

1a on 1120, would be $14000 and COGS Line 2 would be $11000. This is coming from 1125A. Line 1 would be $15K, and Line 7 EOY would be 4000

[tagteam]

You are not supposed to guess at your EOY inventory (or calculate it).

You are supposed to take a physical count as of December 31st. Then you calculate your COGS.

[stech]

I am not guessing.  What I am asking how do I show income earned from selling cars? Doesn't it come from how much I bought inventory for and how much I sold it for? (cost  - selling price). 

[Mike9241]

your numbers are not consistent

1125-A line numbers

1 $15

6 $15

7 end of the year inventory - this is the number you need to know is it $3 or $4?

8 is computed = line 6 - line 7 so if line 7 is $3  line 8 is $12 and if it's $4 line 8 is $11

this is the number that transfer to the 1120 page 1 line 2

1120 line numbers

1a $14

2 either $11 or $12 from 1125-A line 8

3 either $3 or $2 depending on line 2

[tagteam]

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@stech wrote:

I am not guessing.  What I am asking how do I show income earned from selling cars? Doesn't it come from how much I bought inventory for and how much I sold it for? (cost  - selling price). 

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No. The formula is beginning inventory plus purchases less ending inventory equals COGS

[Critter-3]

You also need to enter GROSS income earned then the net profit or loss will be calculated by deducting expenses and the COGS.   Follow the interview screens carefully so you make the correct entries.