Visitor II

inventory value

I run a very small photography business on the side. I'm reporting my income and expenses for the business on Schedule C. I carry a small inventory of framed photographs. TurboTax is asking for the value of my inventory. Is the value of my inventory the total cost of what the inventory COST ME or is the value of the inventory the total of what I CHARGE to my customers?

Thank you. 

1 Comment
TurboTax Specialist

inventory value

It's going to be your inventory costs to you, not the retail value if you are using the cost method (most common) of reporting.

 

Here's the how inventory is used to calculate cost of goods (COGS) sold: Beginning inventory + purchases - ending inventory = COGS. 

 

EX: If you began your business in 2017, beginning inventory would be 0 + the costs of your frames, etc - ending inventory mounts. Some numbers:   0 + $2000-$1800=$200 COGS