It is not an erroneous 1099-K so you will have to enter it in as a business activity, and record the cost of goods sold there if you want to avoid the high taxes. The other method is an incorrect way of doing it and will just raise the eye of the IRS. It is actually a pretty lucrative business not a hobby, making a few dollars to renew a lavish item throughout the year. You do not want to mess with that by trying to work around the tax program.
