When I was active on Ebay I always declared a slight profit as a hobby business. I included some bicycle work done for cash, as well as Ebay sales, less the cost of the storage space I kept most of the inventory in.
I had decent records showing what was actually a net loss if I counted everything I could, but for simplicity didn't even try to claim the computer and the space in the house. I think hobby businesses aren't allowed to show a loss, but checking with an actual tax preparer would be best.
Steve B
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