Has anyone heard that under TCJA that you would not show your inventory in you cost of goods sold?

Forum|Forum|6 years ago
December 7, 2019
4 replies
17 views

One of my clients called and told me that the tax firm that prepares his 1120-s return told him the that the new tax law that you do not include the ending inventory when the COGS is coputed.

ProSeries Professional

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Best answer by rbynaker

Was a 3115 filed?

A "small" (under $25Mil) cash-basis taxpayer can elect to treat inventory as non-incidental materials and supplies.

Operationally I'm not sure what difference that makes since non-incidental materials and supplies are basically treated like inventory (deducted when used, rather than when paid for). But maybe I'm missing something.

sjrcpa

Level 15

That's BS

The more I know the more I don’t know.

sjrcpa

Level 15

There are new rules about 263A and who can use cash basis.

The more I know the more I don’t know.

IRonMaN

Level 15

I'll second the BS. Tell him he needs to find a new tax firm to prepare the 1120S.

Slava Ukraini!

rbynakerAnswer

Level 13

Was a 3115 filed?

A "small" (under $25Mil) cash-basis taxpayer can elect to treat inventory as non-incidental materials and supplies.

Operationally I'm not sure what difference that makes since non-incidental materials and supplies are basically treated like inventory (deducted when used, rather than when paid for). But maybe I'm missing something.

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