I posted this on the self-employment board and they sent me here.http://boards.fool.com/Message.asp?mid=26480948I have an ebay store in which I sell collectibles. This started as a hobby, collecting them a little at a time. I started selling them on ebay a few years ago and discovered that people were willing to pay for these.Well, this last year (perhaps due to the economy), people have been selling their collections for ridiculously low prices. I attend a convention every year that specializes in these items and bought about $2,000 worth of inventory. This was almost entirely a cash basis, but a few people accepted checks. But it was many individual people, and small amounts each time. This was almost impossible to keep track of. Not just the amounts I paid, but also the number of items and type.I've also bought some off of ebay and whole collections from individual people. So, in all, last year I put about $4,000 into inventory. I figured out that I paid about $2 per item.Now, last year I sold about $12,000 on ebay. After ebay and Paypal fees, it's about $9,000. I can also deduct the office space from my utilities, and travel expenses to the convention. But how do I deal with the inventory.My average sale price is between $20 and $25. I sell around 50 items per month. (I also have a full time job and am married with 3 kids, so I don't put a lot of time and effort into it). So how do I value the inventory? I sold off about half, I still have a lot of it. And some will probably never sell. It will not depreciate unless it is destroyed. In fact, I think it will go up in value. I'm just confused as to how to do the taxes. So any help would be appreciated.Thanks,BethPS. My DH is self employed with a home office so I know how to do those forms and I do our taxes. I'm just confused about the whole inventory aspect.