Please see this answer from MaryK1.

If you sold items on ebay, but not as a business or with the intention of making money, you would not have to report the income on your tax return- unless you sold the items for more than you purchased them for.  Even though you do not have to report the income, keep a copy of the 1099-K with a list of the items you sold and how much, with your tax records. 

From the Massachusetts Department of Revenue: If you receive either a federal Form 1099-K or a Massachusetts Form M-1099-K that shows amounts paid to you, you must report taxable amounts on Schedule X, as other income, or if such amounts are derived from a trade or business, on Schedule C. See TIR 17-XX. (emphasis added)

Thank you.  I would appreciate a follow up on remaining questions.  I'm a little confused because other answers from Experts seemed to strongly suggest PayPal/eBay users like me should definitely report the 1099-K in Less Common Income and then look to deduct.

So that said, could you please clarify, and also address the following?

(1) If I were to report the 1099-K for my federal return using TurboTax Deluxe, how should I do it? 

(2) I don't live in Massachusetts.  How do I report for Illinois?

(3) What do I need to have to show proof of what I paid for the items?  Do I need to provide any of this, and how do I input them into TurboTax Deluxe?

Thank you!

Thanks!