I went out of business this year and still have inventory on hand. Can I take a deduction for inventory that I can not sell?
Generally inventory losses and gains must be run through the business (shown as sold on Form 1040, Schedule C, Profit or Loss from Business) when sold even after the business closes. If you cannot sell inventory because it has become obsolete or you have formed the intent to give up possession of the inventory without passing it on to someone else and suffer a loss, you may deduct such losses. If you any remaining inventory for personal use after you go out of business, you cannot take a deduction for that inventory. If you give the remaining inventory away to a nonprofit organization, claim your deduction on Form 1040, Schedule A, Itemized Deductions. When you have business related expenses after your business has closed, you still may deductt these expenses.
