If you earn gross income relating to a hobby, the income is taxable. Any allowable expenses are limited to the gross income earned from the hobby. If you sell goods as part of your hobby, cost-of-goods-sold is deductible, subject to the gross income limitation If the activity is a hobby, you will report the income on Schedule 1, line 8 section of Form 1040. The income won’t be subject to self-employment tax. the cost would be shown as a negative in the line 8 section.
unless you use zero for the cost you'll have to use your best estimate. realize that if you are audited and can't satisfy the auditor, the entire cost you deducted could be thrown out
