Comment: IRS pub. 525 pg. 32

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IRS pub. 525 pg. 32

I'm not saying this makes it law, or that it even makes sense, but this may be where they are coming to the conclusion that you under-reported income.
On page 32, listed under the heading "Sale of personal items" the following example is provided.

You sold a painting on an online
auction website for $100. You bought the paint­
ing for $20 at a garage sale years ago. Report
your $80 gain as a capital gain as explained in
the Instructions for Schedule D (Form 1040).