My wife and I spent $9810.39 buying inventory for EBAY last year and had $8613.31 in sales. How do we report that on Turbotax?

[pk]

On your business income portion -- schedule-C whcih gets included in your individual return --- you  determine your COGS ( Cost of Goods Sold ) as cost of  inventory forwarded from the year before  PLUS all inventories bought during the year LESS cost of  residnual inventory at the end of the year.  This is your basis ( kind of ).  Your gross sales  is  total sales less any taxes collected.   Schedule-C will also require  you to include any other expenses you may have had  -- taxes, licenses, postage, etc. etc. for the income. All of these items eventually result in your net profit before taxes.  TurboTax will walk you through all of this -- including the schedule-SE ( self-employment ) -- 15.3 % on most of the gain / income you have had from this effort. 

Hope this helps