Artist's inventory

[Margaret CPA in OH]

New (well, she still hasn't sent me anything yet) client showed inventory on 2017 return O boy, $10,000 materials and supplies, 0 eoy COGS $10,000 plus additional supplies of $5092 on line 22 Sch. C.  So no real inventory valuation but does that ever exist?  IF she ever sends 2018 information, I am curious as to how to distinguish between supplies in COGS and other.  Anyone out there have experience with artists?  She paints and shows in galleries.  They are quite good but a bit too abstract for my taste. I just want to do right by her.

[jklcpa]

Is she reporting on a purely cash basis because her receipts allow her to be a small business that doesn't require inventory reporting that would make her either modified cash or accrual?

Artists have exemption from the unicap rules if they qualify.

As for distinguishing materials & supplies in COS from other supplies, you should have that discussion with the artist. I'd think that items such as canvas, paints, frames, framing costs, hardware, freight and other expenses to acquire those items would all be in COS.  Other more general supplies such as easels, brushes, solvents and cleanup chemicals or shop rags indirectly related would be in general supplies in other deductions. That may be splitting hairs and the client should be able to elaborate what is contained in each total.

Edited November 7, 2019 by jklcpa
added last paragraph