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New Member
posted Mar 31, 2022 2:15:12 PM

Under which expense category do I claim stock that was damaged and cannot be sold?

For example mugs that were broken, or tshirts where the design is blurred, and cannot be sold

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1 Replies
Level 4
Apr 23, 2022 3:28:39 PM

This would be considered "Shrinkage" which is damaged or useless product that cannot be sold anymore. It decreases the Inventory account. On TurboTax Online, sign in and go to:

> Your chosen return for the tax year

> On the left navigation pane, click "Income", "Self-Employment", and "Business or Professional Activities"

> Then click the edit button beside your chosen business

> Click "Income and Inventory" then Continue twice, to move to your inventory section,

> You have two options on claiming Shrinkage, you can:

1. The total amount of inventory that is damaged can be the difference between beginning inventory and ending inventory. Say $50 was broken, and you own $500 inventory, your beginning inventory would be $500, and ending inventory $450.

2. You claim the total damaged inventory under "Other Costs".

Make sure to click "Continue" so that your information is saved.

 

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