mdmcfarland Posted April 7, 2008 Report Share Posted April 7, 2008 Last minute client (daughter-in-law) had Schedule C in prior years (Mary Kay). She had no sales and no purchases in 2007 and won't in the future. She had an ending balance in 2006 of $397. What inventory she had, was either switched to her own use or discarded as outdated. How do I show her final Schedule C and not show the loss? Quote Link to comment Share on other sites More sharing options...
jklcpa Posted April 8, 2008 Report Share Posted April 8, 2008 Inventory withdrawn for personal use can either be shown as an increase to sales or a reduction of purchases. Also, the write off of obsolete inventory would also be a reduction of purchases. I don't like the idea of showing the w/d of inv as sales. I'd attach a statement detailing the 2 "reductions" to the purchases line. Since the client had no purchases, the purchase line will be negative $397 and that will zero out the beginning inventory, so cost of sales will be -0-, and the Sch C will not show a loss. Quote Link to comment Share on other sites More sharing options...
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