October 5, 2023 10:13 pm

I Gotta Pay Income Tax For Selling Concert Tickets? Why You Gotta Be So Mean?

Taylor Swift concerts are a billion dollar industry and the IRS wants to capture some of the Blank Space. Originally part of the American Rescue Plan of 2021, the threshold for issuing a 1099-K for transactions was lowered to an aggregate of $600, regardless of the number of transactions. Everything Has Changed; the previous threshold was $20,000 on payments from over 200 transactions.

Note the “aggregate” means if you sell six tickets for $100 each a 1099-K is required to be issued to you by the marketplace such as Ticketmaster or Stubhub. The amount reported will be the total amount received and may not exclude fees you paid to the marketplace for reselling the tickets nor may it exclude the original purchase price of the tickets (and fees charged for purchasing the tickets). We recommend keeping all records involving the buying and selling of your tickets in order to deduct these amounts from the gross amount reported on your 1099-K.

This isn’t just some Cruel Summer nor is it Karma. The tax code has always defined income subject to taxation as “gross income from whatever source derived.” The rule change isn’t intended to create Bad Blood; rather, the purpose of the rule change is to perhaps remind taxpayers of their duty to include gains from the sale of assets in their taxable income.

This isn’t just a Love Story of concert tickets either. The revised 1099-K threshold of an aggregate of $600, regardless of the number of transactions, applies to any electronically received payment, for example Venmo or Zelle. So, let’s say for instance, Tim McGraw Venmo’s you gas money along with other friends for groceries and other reimbursements. You may still get a 1099-K and will need to report it on your tax return. However, you will need to attest on the return these transactions were not income. Again, we recommend keeping records to substantiate even if that means going all the way Back to December to make copies or save information.

You Need to Calm Down before we share this next part with you or else We Are Never Ever Getting Back Together: gains on ticket sales are taxable but if you have a loss you likely cannot deduct it from your taxes. This concept is again, nothing new in the tax code. Losses on personal assets have never been deductible. For example, if you hold a garage sale or sell on Facebook Marketplace, you’re likely not recovering the principle you paid for the items that you are selling. As such, you cannot take a loss on the sale of personal items because you are not in the business of selling your personal items. However, if you are in the business of brokering concert tickets you may be able to take a deduction on your tax return.

To keep it Clean, would you have to pay tax on tickets sales if you received cash instead of using an electronic exchange? Yes. While you wouldn’t necessarily receive a 1099-K, the tax code would still require you to pay tax on any gain. Given the vast amount of data to be tracked, such as having listed the tickets on Facebook Marketplace, we recommend including the gain as income so you are Safe & Sound.

We hope you appreciated the Style in which we wrote this post! It was Delicate, but we don’t mind being the Anti-Hero of tax. Make sure you check every marketplace where you sell tickets or have other similar transactions as they may not mail you a 1099-K and you’ll need to download it. If you do receive a 1099-K whether as a download or in the mail, don’t Shake It Off.

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Tax Glossary

Disaster losses

Casualty losses such as from a storm, in areas declared by the President to warrant federal assistance. An election may be made to deduct the loss in the year before the loss or the year of the loss.

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