First time receiving a 1099-k. Have questions.

[edent508]

So, I have season tickets to a popular sporting team, and, we are now allowed to sell them for a profit on ticketmaster. So, for argument's sake - I paid ~4k for my tickets, and, I was paid out a net total of ~11k USD. I figured, hey, I'll end up taxed on 7k profit - no big deal. Anyways, I got my 1099-k from ticketmaster and I was floored when box 1a reported nearly 14k! I called them up and they said this included the total gross sales, and not the net payout received. For instance, if I list a pair of tickets for 1000$ - they take 10% off the top, plus the charge to buyer a bunch of fees. I, myself, only receive 900$. They sent me a spreadsheet with the fees they took from me, as well as the fees they charged the buyer of my tickets. I am assuming I don't actually have to pay taxes on the 3k I didn't receive, and there's a way to notate (perhaps schedule C?) that I indeed:

1. Paid 4k for my tickets.

2. Ticketmaster accounts for 3k of said total in box 1a.

3. I only really profitted by 7k.

It wasn't obvious to me when I was kind of poking around. Please let me know if my assumptions above are correct, and, where I'd go to handle this pieces?

[AlanT222 · Accepted solution]

Yes, your assumptions are correct.  Below are the instructions for entering a sale of personal assets for a profit.  You would either reduce the proceeds by the amount of fees paid or increase the basis by the amount of fees paid.  

1. Open (continue) your return in TurboTax.
2. In the search box, search for investment sales then select the Jump to link in the search results.
3. Answer Yes to the question Did you sell stocks, mutual funds, bonds,  or other investments in 2019?
   • If you land on the Here's the investment sales we have so far screen, select Add More Sales.
4. Answer No to the 1099-B question.
5. On the next screen, select the type of sale you had (like second home, collectible, or land) and Continue.
6. Continue following the onscreen instructions to enter the sale.

[edent508]

Thank you for your excellent reply. However, I have been going back and forth with ticketmaster, and got this response:

"You are under the IRS federal threshold which is 20,000.00 gross income and 200 transactions or more"

I know my state (MA) only has a 600$ threshold, so I must report these gains. But, it sounds like I don't have any

federal tax obligation?

[JohnB5677]

You can enter the 1099-K as Self Employment income.  You would enter the total amount and then on the expense side of your Schedule C you would put the original price of the tickets and also the amount of the commission.  This should result in the actual amount that you received.

NOTE:  You will not only pay Income Tax you will also pay Self Employment Tax (Social Security and Medicare).

How to Post a 1099-K

[edent508]

Thank you for your excellent reply. However, I have been going back and forth with ticketmaster, and got this response:

"You are under the IRS federal threshold which is 20,000.00 gross income and 200 transactions or more"

I know my state (MA) only has a 600$ threshold, so I must report these gains. But, it sounds like I don't have any federal tax obligation?

[edent508]

Thank you for your excellent reply. However, I have been going back and forth with ticketmaster, and got this response:

"You are under the IRS federal threshold which is 20,000.00 gross income and 200 transactions or more"

I know my state (MA) only has a 600$ threshold, so I must report these gains. But, it sounds like I don't have any federal tax obligation?

[RobertG · Accepted solution]

No, that is not what that means.  You have to report all taxable income. 

Those thresholds are for the issuer, not the individual taxpayer.

The instructions from AlanT222 are the best way to report it.

[edent508]

Okay, thank you. I went ahead and followed the instructions and I now see ~7k profit, and what I owed for federal and state went up as expected.  Now, I have about 40 individual sales here, all sold throughout 2019. Can I simply list them all as 1 sale? I basically listed the tickets were obtained in 4/2019 and sold on the same day. This is much easier than going thru each individual item and figuring out how much each ticket cost, as there are pricing tiers. The math will come out the same, it's just incredibly painful to have to go thru each one.

[DawnC]

Yes, it all goes to the same place, so no need to do each sale individually.  Just be sure you keep detailed records in the unlikely event you are asked about anything!  

[uptheirons]

Not to mention the fact that we (I'm in the same boat this year) paid taxes on the season ticket package!

[hockeytime509]

What if I paid $2500 for my tickets and get around $1000 back (the Falcons were terrible couldn't get face value) i should have to claim anything correct since it was a loss? 

[Vanessa A]

Yes, you are correct.  This was a sale of personal items at a loss so it is not reportable.  However, if you are getting a 1099-K, you should it along with records to show your loss since you the 1099-K is also reported to the IRS.

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