Hello. Recently I started selling some of my tickets to sporting events through Stub Hub. I have a few season ticket accounts and I sell tickets if I cannot attend games. In many cases, I profit on the price of the re-sale. My understanding is that I will receive a 1099K documenting the gross sale. Am I able to deduct the amount I paid for the tickets and deduct the fees that are collected from StubHub? Also, what percentage can I expect to be taxed on the net profit I make? Are there any factors that influence this, or is it basically a fixed percentage that is taxed? Thanks.
Hello Drew580, You will be able to deduct the fees from StubHub and the original price of the tickets that you bought for the purpose of making a profit. You will need to report the cost of all of the tickets that you bought for the purpose of making a profit, regardless of whether you actually made a profit from the sale on the specific tickets (ordinary income). If you are not in the business of selling tickets, you could possibly use Schedule D to report the income from the sale of tickets (property), but there are additional requirements for Schedule D (cap gain). The % that you will be taxed on the profit will be a determination of how much the income increases your overall income and how the income is recorded--- business income would be ordinary income % while Schedule D would capital gain %.
Hi!
Since you are profiting on the re-sale of the tickets, you should report the income as a Sole Proprietor.
Sole proprietors include their business income on a Schedule C on their personal tax return, then yes, you can write off the price you paid for the tickets and the deduct the fees and other necessary expenses. Please see the links below for additional information.
https://turbotax.intuit.com/tax-tools/calculators/self-employed/
https://www.irs.gov/pub/irs-pdf/p334.pdf
Regarding the percentage you will be taxed on the net profit; you will pay 15.3% for self-employment tax on the net profit in addition to the regular income tax.
Hello Drew580, You will be able to deduct the fees from StubHub and the original price of the tickets that you bought for the purpose of making a profit. You will need to report the cost of all of the tickets that you bought for the purpose of making a profit, regardless of whether you actually made a profit from the sale on the specific tickets (ordinary income). If you are not in the business of selling tickets, you could possibly use Schedule D to report the income from the sale of tickets (property), but there are additional requirements for Schedule D (cap gain). The % that you will be taxed on the profit will be a determination of how much the income increases your overall income and how the income is recorded--- business income would be ordinary income % while Schedule D would capital gain %.