No, you would not be allowed to deduct the value of the items you converted to business use. Your reasoning is sound, but IRS Publication 535 says:
"Payments in kind. If you provide services to pay a business expense, the amount you can deduct is limited to your out-of-pocket costs. You cannot deduct the cost of your own labor.
Similarly, if you pay a business expense in goods or other property, you can deduct only what the property costs you." Click here to see more.
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