Vanessa A
Expert Alumni

Deductions & credits

So you are correct, with everything you have described, it does sound as though your wife's activity is a hobby.  However, with that said, she cannot deduct expenses.  She can only deduct the cost of goods like @Leonard Smith stated. The purse or other items she is buying is her cost of goods.  She cannot deduct her selling expenses such as the shipping costs. 

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