Should of told her you a finance guy and to trade you for some 401k portfolio. Shark tank that inventory for a 10% stake in the dying company
401k is only for work only aka factory, fastfood, teacher,etc... (maybe you can self employ solo 401k, than you going need to claim that on your tax and register and all that jazz depending on your state rules and laws)
what this sister has
in finance we call it
"unrealized gain/loss"
in this sister case, she is just recognizing
unrealized gainthat $10k of inventory when all sold
she think she will have an unrealized gain $4k assuming she could sell that $10k inventory for $14k
that sad thing is...
you can also have unrealized loss
she might not be able to sell, makeup might expire and get toss out
so that $10k might only be worth $6k when everything is sold and all the expire date are toss out
with an unrealized loss of $4k