Has anyone heard that under TCJA that you would not show your inventory in you cost of goods sold?

[john1066]

One of my clients called and told me that the tax firm that prepares his 1120-s return told him the that the new tax law that you do not include the ending inventory when the COGS is coputed.

[sjrcpa]

That's BS

[sjrcpa]

There are new rules about 263A and who can use cash basis.

[IRonMaN]

I'll second the BS.  Tell him he needs to find a new tax firm to prepare the 1120S.

[rbynaker · Accepted solution]

Was a 3115 filed?

A "small" (under $25Mil) cash-basis taxpayer can elect to treat inventory as non-incidental materials and supplies.

Operationally I'm not sure what difference that makes since non-incidental materials and supplies are basically treated like inventory (deducted when used, rather than when paid for).  But maybe I'm missing something.