Basis of Athletic Tickets Sold

[brhentschel]

When I can't attend a college athletic event, I often sell the tickets and I'm aware that I will need to report any gain on the sale over the price of the original ticket.  My question is whether the seat contribution to get the season tickets in the first place can be added to basis.  Hoping you can offer some insight.  

[Anonymous_]

If you bought the season tickets for personal use (which is apparently the case), then they are capital assets in your hands and any gain on the sale (again, the presumption is you held the tickets for one year or less) would be short-term capital gain.

Selling off one ticket at a time would require some sort of allocation of the total season ticket cost to an individual ticket sale.

[brhentschel]

All this makes sense.  Still one open question.  If I pay $1000 for the season tickets and I pay $800 as a seat contribution (which is non-deductible as a donation), my total cost for personal use is $1800.  Is basis $1800 or just $1000 as the price of the season tickets?  I can't seem to find an answer to that question anywhere.  

[Anonymous_]

It would be whatever your cost was for the season tickets, including tax, etc., that you were required to pay to obtain them.

If there was some sort of donation that would be tax deductible, then that would not factor into your basis.

[Opus 17]

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@brhentschel wrote:

All this makes sense.  Still one open question.  If I pay $1000 for the season tickets and I pay $800 as a seat contribution (which is non-deductible as a donation), my total cost for personal use is $1800.  Is basis $1800 or just $1000 as the price of the season tickets?  I can't seem to find an answer to that question anywhere.  

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This gets complicated.  You're talking about a situation where the college charges you $800 for permission to buy tickets (that they count as a tax deductible donation) and $200 for the actual tickets.  

I think I disagree with my colleague.  When you sell the tickets, you are not selling or transferring any portion of the subscription fee ("donation") or any portion of the right to buy future tickets that the subscription fee conveys (because you have to buy season tickets every year to retain the right to buy future season tickets, and that's part of what the $800 "donation" is for.  That right is not transferred to the buyer of a single game ticket.).  You are only selling the right to attend a particular game on a particular day.  Of course, by treating the $800 as a tax deductible donation and $200 as the price of the tickets (divided by the number of games to get the value per game), any capital gains you have will be higher.

As a separate argument, I think that even if your whole basis is the full price ($1000), if you actually take the itemized deduction, the basis must be reduced by the value of the tax deduction ($800), resulting in a net $200 basis.  

[Anonymous_]

@brhentschel previously stated that the contribution was "non-deductible as a donation". 

The season tickets are capital assets in the hands of @brhentschel and the basis is whatever he was required to pay to obtain them. Obviously, that purchase price must be allocated, in some fashion, to each individual event.

Also, if you actually read @brhentschel's post (carefully), it was clearly stated that the purchase price total was $1,800, which included a $800 contribution, not a total of $1,000 ($200 plus an $800 contribution).

[Rick19744]

We need to clarify some thing here:

• I'm not clear on whether the $800 cost is a one-time cost or an annual cost.
• Regardless of the answer to bullet number 1, this cost / fee is no longer tax-deductible post TCJA; it used to be 80/20, but now 0 (zero).
• As a result, this increases the basis of the cost of the tickets.  There is no charitable contribution component tied to this fee.
• So, if the $800 is an annual fee, then I believe your basis in the ticket package is $1,800.
• If the $800 is not an annual fee, then the allocation becomes complicated; and at this point I would only use the $1,000 in determining your ticket allocation.

[Anonymous_]

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@Rick19744 wrote:
.....if the $800 is an annual fee, then I believe your basis in the ticket package is $1,800.

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I was presuming that was the case. I had the same situation occur with season tickets for two different college football teams and both required an annual "contribution" in addition to the price of the ticket package.