Question

Inventory - is it better to write off inventory that is discontinued or donate it?

Forum|Forum|6 years ago
June 1, 2019
1 reply
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What about expired inventory?

TurboTax Self Employed Online

A

AmyT

Employee

There is no advantage, from a tax perspective, to writing off inventory as opposed to donating it.

Either way you handle it, you will receive a deduction via cost of goods sold (COGS), for the cost of the inventory.

When you enter your inventory purchases and ending inventory, TurboTax makes the calculation of "COGS cost" for the year based on these numbers and you beginning inventory. If you do not include the cost of the items donated, written off, or expired in your ending inventory, these items will automatically be included in COGS.

Note: You will not include the cost of these items as "donations" or "write downs" separately on your schedule C.

M

MP1313

How do I list something as having been donated?

I closed my business with more than a $3000 loss last year and donated the remaining merchandise. I can't seem to figure out where or how to include this in my Business TurboTax reporting. Everything I do seems to end the previous year at a loss and last year at just $0.

Where do I need to document that I still had the same loss from the previous year? How do I get this to become a deduction??