You can use Part III Cost of Goods Sold on Schedule C to report the cost of your goods sold.
On Line 35 Inventory at beginning of year can enter your cost of the items sold which would be the sales amount reported on your 1099-K.
Then on line 41 Inventory at end of year you will enter $0.00. This will make line 42 Cost of goods sold equal to the amount reported on your 1099-K.
This will carry over to Line 4 Cost of goods sold (from line 42) in part 1 and be subtracted from your Gross reciepts Line 1
Then Line 7 Gross income becomes $0.00. Many steps but you have reported your eBay income Form 1099-K entered the cost of the items sold for a gross income of $0.00.
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