They're kind of both correct.
The answer depends on your 1099-K. If it is 100% for the sale of personal items then you don't need to split it up. You can report the whole amount as @ErnieSO describes above.
If, however, part of your 1099-K is for personal items and part is for something else (business income, gambling winnings, etc.) that is taxable then the method where you report the personal income as investment income is the right one for you. That way you can split the 1099-K up to make it match for the IRS.
The most important thing to remember when you are putting in the personal item sales is that you are not allowed to lose money selling your stuff. If you sell it for five dollars then the most it can cost you is five dollars. Doesn't matter if you paid fifty for it.
@chucster
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