Should i include product my wife sold as income to her business or should it be inventory/materials? Her main business is music classes.

[Shaun1]

My wife runs a Kindermusik class which is classes that include home material.  This past Christmas she took orders and sold a bunch of instruments for parents to use as Christmas gifts.  Should I include the materials she sold as a part of her gross income?  or put them somewhere else in the return?

[TurboTaxSusan]

You would include the income she made from the sales of the items in gross income.  Then on the inventory page you can include the amounts that she paid for the items, or Cost Of Goods Sold (COGS). The expense will be subtracted from the income.