Get your taxes done using TurboTax

Since the IRS has no idea of the source of that income you should report it and then back it out like this:

 

You should report the 1099K income as Less Common Incom. Other Taxable Incomeand then report the value of the personal items as a negative reversing entry in Other Taxable Income: You can specify “adjustment for 1099 K, personal items not sold at a profit “.