Inventory

Forum|Forum|2 years ago
August 15, 2023
3 replies
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I sell memorabilia as my business. Do I need to report my inventory when filing my 2022 taxes? I did last year (2021).

Not A Product Question

ee-ea

Employee

If you are a small business taxpayer you can choose not to keep an inventory, but you must still use a method of accounting for inventory that clearly reflects income . You qualify as a small business taxpayer if you: have average annual gross receipts of $26 million or less (indexed for inflation) for the 3 prior tax years, and are not a tax shelter.

Mike9241

if that's what you're selling I see no exception for treating the items as inventory. factually, if you failed to account for them, you would not be fairly reporting income which would be a substantial tax issue.

Opus 17

Employee

If are buying inventory, selling inventory, and holding some inventory (bought in one year but will sell in a future year), why would you not report your inventory?

If you are doing something else, you would need to let us know more about your business so we can understand your question.

fcesarzAuthor

thank you, I am purchasing items such as balls, helmets, jerseys. Then I am getting them signed and then authenticated and then selling on ebay. It's difficult to track the inventory. It would be much simpler to use the cash method of accounting, just tracking expenses and income.

I read this and assumed I could use the cash method:

However, if your business' annual gross receipts for the last three tax years average out to $26 million or less per year, you can opt to use the cash method and expense the cost of inventory at the time it was purchased, rather than waiting until after it's been sold.