How to write off inventory?

I appreciate your posting here in the Community, @Bender_1227. Let me share some tips and guidance on writing off an inventory.

We can record this as a promotional sample that has no value. First, we can create an expense to track. Here's how:

1. Go to the Gear icon, then under the Your Company section, click on Charts of Accounts.
2. Select New, and from the Account Type dropdown, select Expenses.
3. On the Detail type dropdown, choose Advertising/Promotional.
4. Enter the name you prefer.
5. Hit Save and Close.

You can follow the next step in creating an invoice for the item on this link: Write off inventory items given as promotional samples in QuickBooks Online.

If you are using QuickBooks Desktop and need to adjust your inventory quantity, detailed instructions can be found by following the link.

Moreover, visit these articles to learn more about running a report:

• Run a report in QuickBooks Online
• Customize reports in QuickBooks Desktop

If you have any additional concerns regarding your inventory, please don't hesitate to reach out. We are available 24/7 to assist you.

@Bender_1227 

Why would you use Schedule D?  If you truly have obsolete inventory, just expense it to COGS in Part III of Schedule C if this is a sole proprietorship (SP).  There's no dollar limit on that.  If this is anything other than a SP, expense it to COGS on the business return.    

@JoanaC 

Did you even read your customer's post?  There was no mention of promotional items.   

Writing off inventory in QuickBooks isn't all that straightforward. It ain’t like just putting it neatly into a form like Schedule D. If you’ve got inventory that's lost value, there's a few steps to get through. In QuickBooks, adjust your inventory to show those items aren't assets anymore. Create an inventory adjustment to show shrinkage or obsolescence. Make sure to point this adjustment to an expense account specific for inventory write-offs.

About taxes, the $3,000 you mentioned usually applies to capital losses, mostly for investments. For inventory write-offs, it counts as a business expense, not a capital loss. You’d normally show this as a reduction in the cost of goods sold or as an expense on Schedule C, not Schedule D. I'd definitely check in with a tax advisor or accountant - this stuff can get tricky, and you’ll wanna make sure everything lines up with your tax and bookkeeping.

I once had to recheck my own records, so keep good records of what’s written off and why it’s valueless. Real handy if an audit ever comes up. Ask away if you have more questions, especially with QuickBooks settings or whatever else!