Originally Posted by lizbeth42
#1;In relation to closing the business and keeping the inventory, how do I report that on a Schedule C at the end of the year and what kind of impact will it have on my return? (We are a sole-proprietorship and have always filed a Schedule C).
If and when we decide to start up the new business at a later date, how should we go about acquiring this old inventory into the new business?
#3; I'm having trouble wrapping my head around how we would do this and still be able to keep up with COGS and all.
#1;When closing a biz, you usually need to file returns to report disposing of business property, reporting the exchange of like-kind property, and/or changing the form of your business however,in your case, you may treat/ take the loss for your biz inventory that is obsolete due to depre/ reduced cot basis or etc.also you mark thyour Sch C as final for 2013. Since the business is closed, you may write off the the unsold biz inv. You can put zero end inv on ,line 41, PART 3. By reducing end inv to zero,it ‘d iuncrtease the amount of your COGS and redcue your G/P and net earnings reported on Sch C of 1040 line 29/ 31 and also dere4ase your net earnings reported on Sch SE line 2 or 3 and reduce your final SECA tax liability.Then aslongas your quarterly est taxes > your tax liability reported on 1040 line 1, you can get tax refund possibly.
#2;then you just enter your beginning inventory balances for the inv.i mean it’d be a part of your new beg inv of the new biz. you need to keep applying the old cost bases of the inv and no deductible costs incurred on your sch c I guess unless you, as accrual method user, carry remaining accounting records,i.e. a/p, a/r or etc.
#3;as mnetuoned previously on reducing your end inv in PART 3 as part of COGS.