Selling in volume regarding taxes.
During this calender year I've evolved in the hobby from strictly buying to buying and selling. I am not a dealer in any right, but if I see something below market price I'll pick it up to try and turn it. I don't do it to make a living, but seeing as I am back in school full time it is more like a supplementary stipend to fund my own purchases. I understand that if you have more than $20k in non gift transfers or 200 total transactions through paypal you'll get a 1099. My question is, do you have to have a LLC or similar business license to show the IRS your true gains on that amount. (Example: Lets's say I get a 1099 showing that I received $23,500 this year from eBay sales, but in reality I only cleared $3,500 from that same sales. Without any form of business entity formed am I stuck paying taxes on the full amount or can I show my costs as well?) Also being that gift payments are exempt from the 1099 are gift purchases also exempt from inventory costs? Any help would be appreciated.
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Always looking for rare Tommy Bridges items.
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