John in NM
In the US, I would report the retail value of the tools under "other income" (line 21 on the 2012 form). This is also where you report any cash income from the pursuit of a hobby. When I sell gunstocks and similar parts, this is where I report that income. On the rare, rare occasion that I sell any furniture, that is where I would report it as well. That hasn't happened in years of course

The one time I asked a tax professional about how big hobby income can become before it is considered a business, the answer I got was along the lines of "if you need to worry about it, then it should be a business". Swell