The discussion seems to center around the issue of what is considered income. Is it gross receipts, or gross receipts less the cost of the items sold? IRS publication 17 discusses hobby income on page 73, but does not define it, only to say that you can't deduct expenses related to a hobby activity, unless you report them on schedule A, which is not allowed for most filers in 2021. As a practical matter, if you report less than the amount reported to you on form 1099-K, you may receive a notice from the IRS somewhere down the road assessing additional tax for income you did not report.
Publication 17 Your Federal Income Tax
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