1099K

[Philski]

Hi. I sold tickets thru ticketmaster this year. I received a 1099K and do not know how to proceed. Here is my situation. Numbers are not actual but are representative.

1099K has $15,000 in Box 1A and shows 41 transactions in box 3. Note this $15,000 seems to have no relevance to my actual sales or even posting amounts. My guess is that this is what TM received including fees and markups from buyers. Does this number go anywhere and is it known that this number does not relate to my actual sales or will I have to explain it?

I actually had 40 transactions and it was confirmed by Madison Square Garden.  I called TM and they said the 41st was for tickets issued for a playoff game that never got played and thus the transaction shows as cancelled.

I actually paid $8,000 for the tickets in the 40 transactions and sold them for $12,000. (includes all 40 transactions whether sold for profit or loss)

3 of those 40 transactions resulted in losses.  For those 3 loss transactions, I paid $400 for the tickets and received $300 back.

I do not know how to enter this into turbo tax. What do I do on 1099K section? Where do I put individual transactions? Please be as detailed as possible as this is all very confusing.

[RobertB4444]

Since this appears to be a side business that you're running and not personal item sales then you will need to declare this as self-employment income.  

In TurboTax you'll scroll down in the wages and income section until you reach 1099-MISC and other common income.  Click start next to the 1099-K. Enter your 1099-K exactly as it is printed.  The IRS has a copy of that and will expect to see the full amount from the 1099-K on your return.  

You'll need to figure out what the Ticketmaster fees were - that should be the difference between what you received for your sales and what is on the form.  Then you will enter the cost for the tickets that you sold.  You will owe tax on the profit over and above the fees and the cost of the tickets.

@Philski 

[Philski]

I actually have season tickets and go to about 1/3 of the games due to distance and conflicts.  Does this still count as a side business and not personal sales?

[Philski]

Also, do the profit and loss parts go into different sections and are tehre any other ramifications of 3 of the 40 being losses?

[DianeW777]

As indicated previously, it does appear you are doing this for profit.  Review the rest of the details about hobby and business so you have all the information necessary.

If you believe you are selling personal use items and not engaged in this for a profit or livelihood you must have the recorded details of your sales. In this situation you can report only the tickets where you had a gain. Personal use items sold at a loss are not reported on your tax return and cannot reduce other taxable income.

To enter your sale in TurboTax, follow these steps. Click this link for more information. Where do I enter Investment Sales?

1. Open or continue your return.
2. Navigate to the investment sales section:
   • TurboTax Online/Mobile: Go to investment sales. If using this application, make sure it is open
   • TurboTax Desktop: Search for investment sales and then select the Jump to link.
     • Or Personal Tab > Continue > I'll choose what I work on > Scroll to Investment Income > Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other
3. Answer Yes to the question Did you sell any of these investments in 2024? (or Okay! to Time to kickoff your investments!).
   • If you land on  the Investment sales summary or Your investments and savings screen, select Add More Sales or Add investments.

Here is the IRS definition of a hobby or a business. This IRS link will help you: Business or Hobby?

Key elements:

1. A hobby requires you to report the income you received.  Under the current tax law, Tax Cuts and Jobs Act (TCJA), no expenses are allowed to be used to reduce the money collected even if you itemize deductions.
2. A business allows you to deduct the costs necessary to obtain the income.  The law explains that 'you must be engaged in the activity to produce a profit'.  The test under IRS tax law is that you must show a profit three out of every five consecutive years to be considered a business.

Once you decide what type of income this is you can use the links below to see how to report.

• How do I enter a 1099-K for hobby income?
• How do I report income from self-employment?

A business will require self employment taxes to be paid as well, social security and medicare.  TurboTax will walk you through the process.

@Philski