Tax implications when selling prior years inventory this year?

USA Discussion in 'General Tax Discussion' started by JW Rodgers, Dec 2, 2018.

  1. JW Rodgers

    JW Rodgers

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    Hello, I am starting to liquidate my businesses inventory and wondering if liquidating too quickly might create extra federal income taxes. Since the inventory is from prior years and was reported to the IRS annually and now that I am selling it down is it considered 100% profit? Let me pose this scenario and any comments would be GREAT!

    Re-Sale Biz Operations for 2018
    --------------------------------
    Sales $2 million
    Biz Operations & rent, etc.. cost $300,000
    Product purchased for resale this year $800,000
    Product sold from prior years inventory this year $600,000

    So would your net taxable income still just be 300,000 ?

    Thanks in advance!
     
    JW Rodgers, Dec 2, 2018
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