Sadly, Mr. Eightbore, your view, while noble, is not one the IRS considers that of a person who wishes to stay out of jail.

A profit of most any sort will place you in the 'owe money' category. Certainly a well trained CPA can get you out of it sometimes, but I'll bet in this case a bloke who paid $50 for a gun, or was gifted it, will be expected to cough up a hefty portion of the $175K to the IRS so they can dole it out to whichever of Obama's minions has the outstretched hand.

In a fair world, no used item could be taxed - only first time sales of goods would be taxed. But, no one said life was fair.