@user17601651056 You receive a broken car play system from Amazon. They keep track of that and send you a 1099 at the end of the year that values that broken car play system at $100. So you have to report that $100 that they tell the IRS they paid you, but what you actually have is the broken car play system, which you value at $0. So you just suffered a loss of $100 and you want to figure out how to report that.
Here's the thing--you could keep track of every single item and what it's value is based on comparable sales or thrift sales or whatever basis you use, and include the reporting of how you value these things in your records in case you are audited. However Amazon wants you to review at least 80 items (or whatever it is) every 6 month review period and that kind of detail is probably not worth your time. So you are looking for a work saving option that the IRS would accept if audited and would not require useless work for little or no benefit. One way of doing that, which Trump made famous/infamous, is to use that value but give it a haircut.
That means that you say, "Overall, by the time I follow Amazon's rules (or whatever you are doing) I still end up with some value, though it is certainly not the retail value of products that might not even be viable and have to be kept for six months, etc. So what is it? You might make some reasonable assumptions and come up with a value expressed as a % of the Amazon retail. IRS might challenge whether your assumptions are reasonable, but they are unlikely to challenge your business choice to do this.
One Vine reviewer I know says she only reviews items she expects to sell for the value of the income taxes. I don't know her tax rate, but if it is 22% then she is saying the items she reviews are worth (on average) 22% of the originally declared value by Amazon.
You also raise the question of storage. If you pay for that storage, you can deduct that actual cost. If it is just mixed in with your personal property, the IRS is likely to say, "No, that is not an identifiable business expense." [He says as he sits in a home office cluttered with products to review and products already reviewed he needs to store someplace.]
