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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