Ticket resellers may very well be in for some tax surprises from the IRS due to new reporting necessities going into impact. Right here’s the most recent.
The American Rescue Plan of 2021 modified the reporting threshold for third-party settlement organizations (TPSOs). The earlier threshold of greater than 200 transactions per 12 months and exceeding an mixture quantity of $20,000 is now simply $600. Which means ticket resellers who offered one Taylor Swift or Beyonce ticket are possible in for some surprises on their 2023 taxes. The reporting requirement can be triggered by the sale value, not the vendor’s revenue.
Taylor Swift tickets common a resell value of $1,035 per ticket on StubHub. Beyonce tickets common round $380 per ticket, so promoting a pair would set off the reporting requirement. Harry Kinds reseller costs hover round $450. Wall Avenue Journal studies this was a banner 12 months for stay occasions—not simply concert events, both.
Fan sellers accounted for about 70% of the ‘Eras Tour’ ticket orders on StubHub, in line with that report. StubHub instructed the WSJ that quantity was about double the variety of fan resellers it sometimes sees for live performance occasions.
Any fan who sells tickets for greater than $600 will obtain a 1099-Okay type from the platform they used to resell the ticket. Skilled ticket brokers are used to coping with these reporting necessities—but it surely’s a brand new requirement for John Q. Taxpayer. The transfer comes because the IRS implements new reporting necessities for TPSOs.
Whereas the brand new revenue threshold was delayed in 2022, it’s unclear how lengthy the reporting threshold will stay that low. There’s at present bipartisan laws within the Senate that will increase the reporting threshold to $10,000 in a 12 months or 50 transactions. A number of companies have additionally fashioned the Coalition for 1099-Okay Equity, which is lobbying Congress for the next reporting threshold.
Reselling tickets for a revenue has at all times been taxable revenue, however the brand new necessities make it simpler for the IRS to see that revenue. The IRS says it’ll present extra steering to tax payers nearer to the 2024 tax submitting season.