I have a client that purchased a book store. A large part of the price was for the inventory. Do I get to use the beginning inventory when calculating COGS (Schedule C-Sole Prop)? Does anyone know if I can use the purchased inventory as beginning inventory when I am completing the schedule C cost of good sold? Or does my beginning inventory have to be zero because that part of the purchase price is not deductible/considered when calculating cost of goods sold? If I don't use the beginning inventory from the purchase then my inventory at end of the year won't be reflective of what is in the store? So it doesn't look right and it makes a very large difference in the business profit which increases/decreases taxes owed substantially.
You have a mix of two issues here: "because that part of the purchase price is not deductible/considered when calculating cost of goods sold?"
The Purchase is various assets. Inventory is an Asset and is a "rotating" asset. It needed to be listed in the Buy/Sell for purposes of separated values.
And then, you have a Beginning Asset value for inventory.
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