why ? I thought you pay tax by residence in most cases.
I know when I worked in US I elected to pay taxes in Canada because I wasn't moving to states (there is tax treaty)
I'm assuming you're selling the toys in the US. If you're selling them in somewhereelseistan, then you probably don't have a US paypal account and none of this matters. Unless you are using a US paypal account, in which case, whoopsie, should have sorted that out ahead of time. Don't funnel money through a country if you're not doing business in that country.
If you buy $1000 of toys and then sell them on eBay for $200 later, then you won't owe tax because you had a loss of $800. However, if you were audited, you might have to prove that the toys originally cost you $1000. If this is the only unusual item on your return, it's unlikely that an auditor will bother with it.
However, if you went to, e.g., China and bought $200 of toys and came back to the US and sold them for $1000, then you will have to pay tax on the $800 of profit.
