I understand that ebay and paypal are now going to be sending out 1099's if you generate over $600 a year. My question is if you do not take any money out of paypal (by sending it to your bank) and generate over $600 do they still send you a 1099? Since I am disposing of a collection that I bought I have already taken out over $600. My question is if I leave any additional funds to be deposited into the account and just spend them on chips or other things will they still add those funds to my 1099? I am just trying avoid paying taxes on something that may not be real income. Another question is - if you do get a 1099 how do you tell Uncle Sam that not all of that money is income (that you have a cost basis in the items sold)?