OK... I beat on this trying to assure that I really understood what I was doing in my spreadsheet.
I now have the forms filled out with NO errors. On 1099-K Transaction Worksheet in the section for 1099-K Reconciliation Section, I was confusing the numbers expected for entry. In Boxes 1, 2, and 3, gross numbers are expected for all entries. 1) Gross Income All Items, 2) Gross income from items that were in the end sold at a loss and 3) That field is calculated, but it represents the Gross funds received for the items that did result in a profit.
In the Cap Asset Worksheet, you then use the Gross Proceeds for each item sold in the Sales Price (Proceeds) column and then in Cost or Other Basis is the raw cost of item sold plus any fees for selling.
Forms like this get a little difficult for users that are not overly versed in accounting skills and that was clearly my problem.
Thanks to @CaryWalker for providing enough feedback to make be challenge what I was doing.
