What to do with unsold Inventory?

[Sherill]

Thank you to everyone who has ever answered my ???? I really feel dumb at times!

My client, a sole prop, has been a quilting shop business person for five years. The end of 2005, went out of business and has inventory (yard goods/material) on hand, that DID NOT SELL during a Close Out Sale.

Can client deduct leftover inventory? Where? Or is it a personal loss?
Thank you again to all who give me directions in this matter!!!!!
Tomorrow is April 1......: o )

[veritas]

I am assuming the method you have for valuation is cost.

If she kept it no deduction. If she disposed of it=loss. If she donated it=charitable contribution.