Hi,
Unfortunately, the IRS will consider this to be income unless you sold the items for less than you paid for them and make the necessary adjustments to the reported income on your tax return (note, you should report the 1099-K, failure to do so will likely result in an IRS notice down the line). Let's take this one step at a time:
- What you posted sounds like it may be a hobby for you. This TurboTax article discusses the differences. Assuming it is a hobby, you may reduce the hobby income reported by the cost/basis of the goods up to the sales price (you can't take a loss on a hobby). See this link that tells you how to do that in TurboTax. Unfortunately, since the Tax Cut and Jobs Act passed, hobby expenses like advertising, etc. are no longer reducing hobby income. You can read more in the article from TurboTax I linked above. There's lots of other helpful information in there too.
- If you do start to consider this a business, you can deduct your expenses without receipts. However, the IRS can and likely will challenge you on that, so be prepared for a fight if you are audited. This article talks a bit more about that.
Hope this helps! Please cheer below if it did.
Best,
Karen
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