Thanks for the replies.

I was plugging hypothetical numbers in the schedule C in TurboTax and you are right. If your beginning inventory is $3000, and you have no sales, your year ending inventory is $3000, then it calculates a net loss of $3000. I think I understand now. If you start a new business this month and have a starting inventory of $3000, that is what you would put in the box for inventory at beginning of year. If I am wrong on anything, please let me know. Thanks for all your help!