I've tried to sell both ways- here's my conclusion: TMR is reputable. Used gear wholesale is about 1/4 of retail. They will need to be lower than that if they're tying up their cash and taking risk on someone else's probable problem unit.
Selling to a HiFi buff is hard. We are a demanding lot and require a LOT of hand holding to get a deal done. After all that time spent (often enjoyable BTW) I've only been able to get about 40% of retail on the best sales and more often 1/3 of retail.
When all the variables are shaken out I have this conclusion: Use my old gear as trade-in on new gear to achieve a "better" sale price. Since you don't want to buy more gear you have to ask yourself: "Can I deal with the kind of buyer who will actually pay for my used gear?" If no; wholesale it and don't look back.
As far as the IRS is concerned you bought your gear with after-tax dollars and sold it for less than your basis. This is not an income event. Nor is it deductible. Your CPA can easily account to the IRS for the PayPal "income" on your 1040. I don't see risk there for you.