Do I Have To Pay Taxes on Reselling Tickets?

SHORT ANSWER: No, you don’t need to pay taxes on reselling tickets, unless you make more selling the tickets than you paid for them. 

If you've got tickets to Taylor Swift's Eras Tour or decided to scalp tickets for the concerts of Bad Bunny, IU, Beyoncé or any other superstars, you could be raking in a good new income stream. But that's not tax-free income: Your profit is taxable. IRS ticket resale rules are a bit confusing, but the bottom line is that you'll need to pay taxes on any income. If you buy Eras Tour tickets for $1,000 and resell them for $1,200, you'll need to pay tax on the $200 difference per ticket. Read on to understand the ins and outs of taxes for reselling tickets, with notable exceptions. 

Do You Pay Taxes on Reselling Tickets?

For the 2023 tax year, IRS ticket resale rules were supposed to change. The new rules state that if you resell concert tickets or other personal items through an online marketplace like Ticketmaster, you would receive a Form 1099-K if the gross proceeds for the year were more than $600. 

There were some glitches, and the IRS announced another delay in the lower reporting thresholds for the upcoming filing season. For tax year 2023 — which you file in 2024 — you probably will not receive a 1099-K unless you sold more than $20,000 from over 200 transactions.  

However, the new rule is in effect. If you earn $600 or more selling tickets on third-party resale sites like Ticketmaster, you must report the income and pay income tax. If you resold tickets for events with Beyoncé, Swift or soccer superstar Lionel Messi and made $600 or more, you have to report that to the IRS and will probably owe some money.

The rules for 2024 are changing again, so if you're actively scalping, you'll need to be ready. For the tax year 2024 — the taxes you file in 2025 — the IRS is planning for a threshold of $5,000. This would phase into implementing a lower $600 threshold originally enacted under the American Rescue Plan of 2021.

New IRS Regulation on Ticket Reselling: What You Need to Know

Before President Joe Biden signed the 2021 American Rescue Plan, you would only receive a form 1099-K if your total sale amount exceeded $20,000 from over 200 transactions. 

With the new ruling, you should receive a form 1099-K if the gross sales exceed $600 with no minimum transaction requirement. The previous regulation would typically only affect professional scalpers selling more than 200 tickets annually, but the new regulation can affect nearly everyone.  

The new IRS ticket resale regulations represent a marked decrease in 1099-K thresholds. But they apply to more than ticket sales. The new rules apply to all sales on all third-party platforms, including:

• Ticket exchange or resale sites
• Online marketplaces (sale or resale of clothing, furniture and other items)
• Peer-to-peer payment platforms or digital wallets
• Auction sites
• Car-sharing and ride-hailing platforms
• Craft or maker marketplaces
• Crowdfunding platforms
• Freelance marketplaces
• Real estate marketplaces

It is a bit complicated this year, because the IRS delayed implementation of the 1099-K issuing rule in both 2022 and 2023, but a phased-in approach will begin from 2024. That means that even though the rule isn't fully implemented and you likely didn't receive a 1099-K if you sold a couple of Eras Tour tickets on Ticketmaster, you are still required to report the income from the sales. The income is taxable, and you must include it on your tax return if you earned more than $600.

How much you'll pay in taxes depends on your situation. If you have a business or are self-employed and resell tickets as part of your business — and you have net earnings of $600 or more — you will usually owe self-employment tax plus income taxes at your applicable tax rate.

If selling tickets was a one-time transaction, TurboTax suggests you are unlikely to prompt self-employment tax for these earnings. However, you will usually have to pay applicable capital gains taxes, or in some cases, the income may be taxed at your standard tax rate. Check out current tax brackets to understand how much you could be required to pay. 

In summary, when you sell an asset — including a concert ticket — for more than you paid, it is viewed as a capital gain and subject to taxation. The official IRS reporting threshold for ticket sales on third-party platforms is much smaller for 2023 than in previous years. If you sold tickets at a profit this year or last year, there's a good chance you could owe more in taxes when you file your 2023 tax return. If in doubt, speak with a certified public accountant (CPA) or check out the best free tax software or the best way to file taxes to get professional help.

How to Prepare for Form 1099-K

According to the IRS, Form 1099-K reports payments for goods or services received during the year from sources such as credit, debit and gift cards, payment apps, online marketplaces and third-party settlement organizations. 

These organizations must fill out Form 1099-K and send copies to the IRS and you. Payments from family and friends are not reported on Form 1099-K. While the reporting threshold for 2023 is $20,000, companies could still send the form for totals over $600. If you receive a Form 1099-K, you must include it with your income tax filing. 

If you don't receive a 1099-K but earned $600 or more, you must report the income. For example, if you sold tickets, clothing or other personal items at a profit, the profit is calculated as the difference between the originally paid amount and the amount received for the sale. 

If you receive a Form 1099-K, you will figure and report the gain on both Form 8949, Sales of Capital Assets and Schedule D (Form 1040), Capital Gains and Losses

If you don't receive a Form 1099-K this year but need to report income, you will report that on your Schedule C. If you keep good records, you can account for any expenses such as any fees, taxes or charges to sell your tickets.

Here is a summary:

• If you received a Form 1099-K, you'll report income on Form 8949 Schedule D of Form 1040.
• If you didn't receive a Form 1099-K but earned $600 or more from ticket sales, you can report your income on Schedule C (for business income) or Schedule D (for capital gains income). 
• If in doubt, speak with a tax professional or CPA to correct file taxes for your situation.
• There are excellent tax software solutions to make filing for small businesses easier. 

Final Tips on Taxes for Ticket Resales

IRS ticket reselling rules have changed drastically in recent years. Chances are, if you had tickets to any of the big concerts this year and decided to sell them, you'll owe income tax on those sales. While IRS rules are relatively simple, tax filings can still feel confusing. Learn how to file taxes for free or get Benzinga's comprehensive guides to simplify tax filing and get the answers you need this year.