The goods you received are a form of compensation--which Amazon believes have a value of $26,000--so go ahead and report the 1099-NEC as suggested by the CPA and as suggested by @JamesG1. If the IRS believes that your reported hobby income should have been characterized as Schedule C income, you will have your evidence in support of proving that your hobby income was correctly reported. The fact that the decision is yours whether to write a review or not, could be viewed as one element in support of a finding that you were a self-employed person; however, that is just one element. There are more than several elements that the IRS will look at to determine whether someone is engaged in a business activity versus a hobby. Here is the IRS' list of factors:
- Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
- Whether you have personal motives in carrying on the activity.
- Whether the time and effort you put into the activity indicate you intend to make it profitable.
- Whether you depend on income from the activity for your livelihood.
- Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
- Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
- Whether you were successful in making a profit in similar activities in the past.
- Whether the activity makes a profit in some years and how much profit it makes.
- Whether you can expect to make a future profit from the appreciation of the assets used in the activity.
IRS FAQs_How to Distinguish between a Hobby and a Business
@Gavmister
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