How to minimize Ebay or Etsy tax nightmare

Those who do casual online sales are concerned that they will get 1099-K forms for aggregate sales of $600 and over, whereas the bright line in prior years was $10,000. Realize that this is not pure profit, since you probably once paid more for the items that you’ve sold. How can you reflect this and pay tax only on your profit rather than on your revenue? One way is to reflect your “business” on the Schedule C portion of your tax return – this lets you deduct cost of your merchandise sold as well as other expenses such as postage and commissions. Of course, you must keep good records to be able to know the original cost of the items sold. Any net profit is subject to self-employment tax. Some say that these costs can be seen as capital assets and any negative difference between the original cost and the selling price is a capital loss which can be deducted. Sorry, but you can’t take a capital loss on personal property.