Thanks again for your assistance. I don't want to report the cost basis as higher than what they were sold for; I'm asking whether it is okay to group the whole thing together as a collection of averages (say, the whole thing increased in value from my good-faith estimate of cost basis) even though it is theoretically possible that some items sold for less than they were bought for and some sold for more, since with 1200 different items some probably did. I just don't know.
In other words, when trying to give a fair estimate of the original cost basis, is it okay to average it out for everything? For example, declare that the collection was bought for $12,000 ($10/item) and sold at $16,000. Even though some of them may have originally cost $1, some originally cost $21, some increased to $40, and some decreased to $2. With 1200 discrete items sold I don't see any other way to feasibly do it.
The family member, like me, has no records of what they paid for any of the 1200 items as they were collected over the course of time. They gave it to me at the beginning of the year and I immediately began selling it off. The items certainly changed in value over time while they owned them but I didn't own most of them long enough for any appreciable difference to occur, and had no original cost to myself for them since they were a gift.
