Your options are to report the income on your tax from Amazon as a hobby or self employment. If a hobby, there are no deductions. The benefit of reporting as self employment is the ability to deduct legitimate business expenses (e.g., a portion of your internet bill, office supplies, or the value of defective items that couldn't be exchanged). The disadvantage is that you have to pay self employment tax. I know of no accepted way of manipulating the FMV of what you received.
