1099-K from PayPal (tax form)

I have to agree with Jetter. Never had an issue dealing with anyone from the IRS. If you are nice to them and honest, you get the same treatment back. I am sure there are bad apples, power can do that, but not my experience yet.

    As a California resident nothing surprises me regarding tax collection. Try buying cigars online. I canceled a recent transaction before completion . There was a 8.75 % state sales tax added for Ca and a $.99 cent State Of California Franchise Tax registration fee . Upon further research , my purchase was to be reported so I could then file ( at my expense ) and pay an additional 56.8 % tax on my purchase . So every $100 incurred a total of 65% state tax . I also had an in law that earns $330 K a year salary receive a letter from the state that said based on his income he owed an estimated amount to California for undetermined miscellaneous internet purchases . The funny thing is , he doesn’t shop on line at all . I no longer buy cigars in America and my online purchases go to my cabin in Oregon . Good luck with the IRS . Having a friend that is employed as one of their collectors , my opinion is that they are looking for the truth and an honest person is believed . Cheers, Mike . 

Shouldn't it work both ways? You sell for a profit and pay taxes, You buy a product and sell for a loss you take the loss. Any  accountant should be able to handle this for you to come out in the good!  also who ever says the irs are nice to deal with is crazy, there thieves m. 

You guys pay so little personal income tax that your ever-more-European states are going to have to pull in every dollar they can from every other source. Over here in the UK I pay 25% tax on the first half of my income and 40% on the second half, about 12% on a the whole lot for mandatory National Insurance. Any active audiophile over here would set up a limited company (£80 one-off fee, done online in 20 minutes), but and sell all their kit in the company name and pay 20% tax on any profits (which will be £0.00), and charge the company loads of expenses just to make doubly sure it makes a good loss every year.  My 17 year old son has a small studio in a shed in our garden and he has his own Limited Company for this very reason. 

Even if you set up a company for the transactions from your hobby it seems to me you would have to depreciate items over a certain dollar amount. I have to do this with certain items I use in my businesse. I have no idea how this would work if you owned the stuff for several years and never depreciated them.