Thank you so much for the help! This is more clear, and digging around it seems to follow the thread: https://ttlc.intuit.com/community/business-taxes/discussion/can-a-paypal-1099-k-for-garage-sale-type....
Is there a reason why I should report my cost as $500 (in your hypothetical example?) Why should I not report the full cost of $1000, and just expect no capital loss benefits (since it's a personal item)? Given that I did spend $1000, it feels weird to under-represent my cost (as long as I'm not expecting any money back).
