Wholesale - business VS hobby for tax purpose

[Elam Reins]

This may seem really dump to many of you, but as a starter I want to understand how to correctly setup the business to protect me from any violation with the law.

Here is my situation: like many new investors out there, I would like to start with wholesale.

Q1. Should I set up a separate business bank account for that purpose ( just at the beginning stage, I understand once you grow it's better to put it under a L.L.C.)?

Q2. Is my wholesale income subject to self-employment income tax? Or is it considered short term capital gain? Or hobby even, if not frequent enough? 

If self-employment, then much higher tax rate;

If capital gain, then all the cost for marketing...etc. are not tax deductible?  

Q3. Any tax consequences when transferring money from business account to personal account (in other words paying myself, again goes back to self-employment vs capital gain question)? For tax purpose what paperwork should I be keeping for filing?

Thanks in advance for any pointers!