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

[ld1915-yahoo-com]

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

[Antomeister]

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.

Thank you for choosing TurboTax.