Self-employed Business, Professional, Commission, Farming, and Fishing Income: How to calculate the mandatory inventory adjustment (MIA)
For instructions on how to fill in the following charts, see Line 9942 – Mandatory inventory adjustment included in the current year.
Chart 1
Cash cost of purchased inventory
Enter the amount you paid by the end of the 2023 fiscal period for the specified animals you bought:
Fiscal period
in your 2023 fiscal period
in your 2022 fiscal period
in your 2021 fiscal period
in your 2020 fiscal period
before your 2020 fiscal period
Enter the amount you paid by the end of your 2023 fiscal period for all other inventory you bought:
in your 2023 fiscal period
in your 2022 fiscal period
in your 2021 fiscal period
in your 2020 fiscal period
before your 2020 fiscal period
Chart 2
Value of purchased inventory for specified animals
Inventory bought in your 2023 fiscal period
Enter an amount that is not more than the amount from line 1, but not less than 70% of this amount.
Inventory bought in your 2022 fiscal period
Enter an amount that is not more than the amount from line 2, but not less than 70% of the total of the value at the end of your 2022 fiscal period plus any amounts you paid in your 2023 fiscal period toward the purchase price.
Inventory bought in your 2021 fiscal period
Enter an amount that is not more than the amount from line 3, but not less than 70% of the total of the value at the end of your 2022 fiscal period plus any amounts you paid in your 2023 fiscal period toward the purchase price.
Inventory bought in your 2020 fiscal period
Enter an amount that is not more than the amount from line 4, but not less than 70% of the total of the value at the end of your 2022 fiscal period plus any amounts you paid in your 2023 fiscal period toward the purchase price.
Inventory bought before your 2020 fiscal period
Enter an amount that is not more than the amount from line 5, but not less than 70% of the total of the value at the end of your 2022 fiscal period plus any amounts you paid in your 2023 fiscal period toward the purchase price.
Chart 3
Value of purchased inventory for all other inventory
Inventory bought in your 2023 fiscal period
Enter the amount from line 6 or the fair market value, whichever is less.
Inventory bought in your 2022 fiscal period
Enter the amount from line 7 or the fair market value, whichever is less.
Inventory bought in your 2021 fiscal period
Enter the amount from line 8 or the fair market value, whichever is less.
Inventory bought in your 2020 fiscal period
Enter the amount from line 9 or the fair market value, whichever is less.
Inventory bought before your 2020 fiscal period
Enter the amount from line 10 or the fair market value, whichever is less.
Chart 4
Calculation of MIA
Enter the amount of your net loss from line 9899 of Form T2042.
Enter the value of your inventory from Chart 2 and Chart 3:
the amount from line 11
the amount from line 12
the amount from line 13
the amount from line 14
the amount from line 15
the amount from line 16
the amount from line 17
the amount from line 18
the amount from line 19
the amount from line 20
Total value of inventory
MIA – Enter the amount from line 21 or line 22, whichever is less.
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