While you call it recycling, in effect you are selling the item at a price that is less than what you paid for it. You have no gain to report; you cannot take a loss because the item was for personal use. Recycling can be done for old electronics, can or truck batteries, and more.
When debts are cancelled in bankruptcy cases, the cancelled amount is excluded from gross income. Tax attributes are certain losses, credits, and property basis that must be reduced to the extent of the exclusion.