"his business would have a loss for the year and the IRS might object to a loss being reported on the sale of his personal items."

Well, the taxpayer has to determine if this is a business or not. You just stated this as if that doesn't matter.

"Assume an individual sells merchandise on eBay that he originally purchased for his personal use and not for resale."

So, not collectibles, not for investment purposes, and not for resale. Just selling personal goods.

"He cannot report the original cost because"

Because everything is not new, is used or old, and had only the residual value = what it sold for. Don't overstate the conditions. Stick to the facts.

"Should he report a “purchase” and a resulting cost of goods sold equal to the selling price?   This would result in a “0” cost of goods sold,"

I think you meant, 0 profit.

You should read IRS directions, and your taxpayer client needs to pay attention to what eBay provides, such as:

https://www.ebay.com/sellercenter/resources/changes-to-ebay-and-your-1099-k