Schedule C and LLC

[S T]

Okay I have a mental block!

Sched C, 1/1/05 thru 6/30/05 changes to 2 member LLC 7/1/05 thru 12/31/05. 90%/10% members. So part year Sched C and part year 1065 with K-1.

Small custom bakery. So I have inventory of "groceries - ingredients" and more in Packaging like boxes, tissues, etc. approximately $10,000 at the close of the Schedule C.

To report on the Schedule C ending inventory do I show actual inventory left as of the Sched C date or zero. Inventory is part of members basis on start up LLC plus additional cash (90% member).

Thanks for your help!

Sandy

[Bees Knees]

ending inventory

Your ending Schedule C inventory should be actual inventory that is being contributed to the LLC. You do not zero things out on the Schedule C because it is not a corporation being liquidated in a taxable exchange. Besides, showing zero ending inventory would inflate your cost of goods sold expense.