Another Inventory Question

[DaveO]

Client is a craft brewery, They have no retail sales, all beer is kegged and sold to distributors.
At year end there may be 3 classes of inventory.

1. Un-used grain and hops.
2. Un-finished beer in holding tanks.
3. Finished beer in kegs awaiting sale to distributors.

My first question is which of these items are inventory?
My second question is how much beer should I charge for the return (they are an LLC).

[BOB W]

Client is a craft brewery, They have no retail sales, all beer is kegged and sold to distributors.
At year end there may be 3 classes of inventory.

1. Un-used grain and hops.
2. Un-finished beer in holding tanks.
3. Finished beer in kegs awaiting sale to distributors.

My first question is which of these items are inventory?
My second question is how much beer should I charge for the return (they are an LLC).

All classes are inventory and you should get 5 kegs per year + $3,000

[Roland Slugg]

The kegs themselves ...

... are not inventory, but are a depreciable asset. This includes all the brewery's kegs, whether empty or full and whether they're at the brewery or in the possession of wholesalers or retailers. This assumes, of course, that the kegs are returned to the brewery when empty. The beer in the kegs is inventory.

[taxxcpa]

Inventory and fee

The inventory question has been answered, but as a fee, you should take your payment in-kind as barter income. I would shoot for 'all the beer I can drink' as a proper fee.

You may need to take a taxi home after you visit the client's place of business.