I have picked up a new client for 2018. They are a manufacturer with both raw and finished goods inventory (Under $25 Million). Historically, they simply expensed all purchases of raw materials. My intention when I picked up the client was to research the applicable 3115 Codes and make an adjustment.
In researching the 3115 Codes, I saw several articles questioning whether or not a small taxpayer needs to report inventory. Some articles seem to state it is only for §263(a) items and other articles seem to indicate it includes all inventory costs. It seems that guidance is very much needed on this issue. The client has historically not recorded inventory in their books (QuickBooks).
I have googled the topic and the "guidance" is inconsistent.
I am looking for ideas on this topic, CPE opportunities to study further, and any points in the right direction!
Thoughts? Comments? Ideas?