The Eternal Squire wrote:
This is to determine initial corporate inventory.

My advice here is to choose the method that gives you an answer of
zero. Otherwise you have to deal with inventory taxes (depending on
locality).

The fair market
value of an item is defined as the price a disinterested party is
willing to pay for it in an arm's length transaction. So that value
of stripped components actually isn't negative, this is why salvage
works: it creates value by selling saleable parts from a valueless
scrapped object.

If necessary, do not create taxable value until you can sell it.
"Creating value" that you have to pay inventory taxes on is foolish.

The folks that actually do this stuff for a living (usually meager, but
they seem to enjoy it) quickly learn that if you aren't turning over
your inventory several times a year, that you aren't making any money.

Realistically the IRS may very well classify your attempted business
activities as a hobby if all your components sit in boxes for years
without getting sold. And classifying it yourself as a hobby may be a
good thing too, at least psychologically.

Some localities also tax personal (non-business-inventory) property and
I also advise you to not inflate this number either!

Important note: I am not in any way a business or tax advisor. But I do
know (through the school of hard knocks) what I have to do to keep my
hobbies/obsessions from becoming some stupid time-and-money-sink
business model :-). That doesn't mean I don't do them, it just means
that I keep them in a separate compartment in my head full of holes.

Tim.