Inventory deduction

9 replies
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Hello, my client has two LLCs, she created one LLC for the purpose of buying inventories and the other LLC she uses as the business to sell her products. For this situation, how can she deduct the inventory expenses on her tax return? and for the other LLC that has no income generated, what should she do about it? Thank you

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T

TaxGuyBill

Are these Single Member LLCs that have not made an election to be taxed as a corporation?

If that is the case, they are "disregarded" for income tax purposes. That would mean that for income tax purposes, SHE bought inventory and SHE sold the products. It would all be one business.

J

Jackson LeeAuthor

Level 2

Yes, she is a single llc member, however she has two llcs. So she can just treat it as one business?

qbteachmt

Level 15

so I have to file 2 LLCs tax returns but her other LLC generates no income only inventory expenses. How could I do that? thank you

"but her other LLC generates no income only inventory expenses. How could I do that?"

It's not Reality. You know that.

The goal for any business is to show the income and the related costs that generate that income. That's a fundamental part of all of this.

"so I have to file 2 LLCs tax returns"

The Fed is filed using one Schedule C. Tell her why this is going to be combined. Then, have the person fix this situation, and whatever she paid for that guidance, I would recommend she gets a refund from that person. And then finds a better consultant.

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