The cost to purchase and make improvements to the items you resell is your Cost of Goods Sold (COGS). As you go through the TurboTax interview, you will be asked about our expenses. One of the expenses you can select is "Inventory". Select Inventory as an expense category and continue with the interview. When you get to the screen that says "Let's get the cost of goods for your [business] sales work". Here you will enter the cost of the items you purchased for re-sale, the costs to "fix up the items sold". This will give you your COGS, which will be listed as an expense on your Schedule C, which reports the income and expenses for your business.
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