Q. Do you believe the IRS would accept the -$519 income without question?
A. Yes. Yours is a common situation. And your income is low enough not to attract attention.
That said, $519 is not the correct number to deduct. In your "not for profit" activity, you may only deduct cost of goods, not expenses (sales fees, shipping charges, packaging and misc.).
That said , it sounds like you were in this to make a profit. As such, it should be reported as self employment. This means you will pay about 14% self employment (social security and medicare) tax, in addition to income tax. But you'll also be allowed the 20% Qualified Business Income (QBI) deduction.
