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kimforbes
June 10, 2024
Question

Inventory

  • June 10, 2024
  • 1 reply
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I have to sell inventory from one company to another. I don't want to pay GET taxes twice. How do I record the bulk inventory I am selling to another company (new company that we established and own) I will pay the tax once the items sell retail.

 

Mahalo!

1 reply

I
Ivan_G
June 10, 2024

Transferring items from one company to another requires professional assistance, kimforbes. I'm delighted to help you and share details on achieving this in QuickBooks Desktop (QBDT).

 

To avoid paying your taxes twice, we can record an inventory adjustment to ensure a seamless transfer of your inventory items from Company A to Company B. This procedure could help you deduct your inventory products from the first company. Following that, enter the deducted items to the second company.

 

Since this process will impact your profit and loss data, I recommend seeking assistance from your accountant. Then, kindly review and follow the steps for setting up an adjustment to your inventory on Company A from this link: Adjust your inventory quantity or value in QuickBooks Desktop.

 

For the receiving company (Company B), it's best to generate the inventory item with the cost and quantity of the items that need to be moved by referring to the records from the first company file.

 

Furthermore, since you've transferred your inventory products to company B and will sell the items, every sales transaction will only generate taxes for this company moving forward.

 

Finally, whenever you need to track and manage inventory items from different locations or areas, the Advanced Inventory feature in QBDT will do the trick. It helps ensure your item's quantity on hand for every warehouse or site location is precise.

 

Let me know in the comment if you have more queries regarding selling transferred inventory items in QuickBooks. I'm always here to lend a hand.

K
kimforbesAuthor
June 10, 2024

Thank you for the great detailed information. I still need to "sell" the inventory from first company and 2nd company will pay wholesale. I just want to keep the money off the P&L so I don't pay taxes on the "selling" or moving of the product. I will pay the tax on the retail sale in the second company. Does this make sense?

S
SheandL
June 11, 2024

To record the bulk inventory you're selling to another company, we can adjust your inventory information in the company you're selling them, kim.

 

In QuickBooks Desktop (QBDT), you can record the transfer of inventory as a reduction of equity from the first company and then an increase in equity for your second company since they'll be receiving the inventory.

 

Adjusting them will help balance the effect on your profit and loss, as these entries will offset each other. To do so, you can follow the steps below to adjust inventory in the company where you're selling them:

 

  1. Decide what kind of adjustment you need.
  2. Set up your inventory adjustment account. Instead of Cost of Goods Sold, please use equity. At the same time, it's best to consult your accountant so they can guide you on what specific equity account you should use.
  3. Adjust your inventory.

 

For more detailed steps, please read this article: Adjust your inventory quantity or value in QuickBooks Desktop.

 

After this, the second company will sell the inventory at retail price, and the income from this sale will be recorded in the company's profit and loss statement, and taxes will be paid on this income.

 

Moreover, it's still best that you're accountant will guide you in this process to ensure that your books are accurate and provide tailored advice for this situation.

 

Additionally, if you want to modify your inventory of finished goods in QBDT, you can check out this article to learn more: Adjust your inventory of finished goods.

 

You can get back to us if you have further questions about recording inventory in your company file by replying to this post. I'll be sure to help you anytime.

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