How to value inventory for business based on labor?

[KaraG]

You can't make up numbers. The IRS would want proof. Labor costs would be what you actually paid others. Inventory is what you actually had at year end. COGS is what you actually spent on that inventory in 2018, the inventory is what you have left. You don't want to inflate those numbers, they would still be wholesale value, not retail. You'll use the inventory number again next year as a beginning inventory.

Did you have any income? If yes, you have to do a Schedule C.