My accountant maintains that as long as I have records of my purchases, the cost basis is what was actually paid. No depreciation....straight line math as the goods sold are considered inventory. If you sold for more than paid you have a gain. If for less, you have a loss. I believe it is on Schedule C. You will need copious record keeping. He (and I) may be wrong with this practice, but I trust him. I never bothered to research myself. I pay him for his guidance.