Even if you sell personal items at a loss (for example, selling a couch or something at a garage sale for less than what you originally paid), PayPal is required to report the total amount received for goods and services. This means the sale will appear on your 1099-K form if you meet the threshold for reporting.

However, not all amounts reported on the 1099-K may be taxable income. It’s recommended to consult a tax professional to understand what amounts are taxable in your situation.