Under which expense category do I claim stock that was damaged and cannot be sold?

This would be considered "Shrinkage" which is damaged or useless product that cannot be sold anymore. It decreases the Inventory account. On TurboTax Online, sign in and go to:

> Your chosen return for the tax year

> On the left navigation pane, click "Income", "Self-Employment", and "Business or Professional Activities"

> Then click the edit button beside your chosen business

> Click "Income and Inventory" then Continue twice, to move to your inventory section,

> You have two options on claiming Shrinkage, you can:

1. The total amount of inventory that is damaged can be the difference between beginning inventory and ending inventory. Say $50 was broken, and you own $500 inventory, your beginning inventory would be $500, and ending inventory $450.

2. You claim the total damaged inventory under "Other Costs".

Make sure to click "Continue" so that your information is saved.

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