How can I notate that the sales on my 1099-k were cancelled? I made sales in May 2020 totalling ~4k$ ..but received zero dollars as the event was cancelled due to covid?

[edent508]

Single filer.  Actually, I made a mistake, my "sales" totalled ~$2500. I received zero dollars as the transaction was cancelled, as fans were not allowed in the venue due to COVID. I want to accurately reflect this so the IRS doesn't think I tried to shirk responsibility. Ticketmaster said they were required to list all sales regardless of whether there was an adjustment or cancellation.

[ColeenD3]

Are you saying that you made zero income but had $2,500 in expenses promoting the event? If so, you can take your expenses on Schedule C, even without income. The Self-Employed program will walk you through the steps.

To set up your business:

1. Open or continue your return.
2. Search for schedule c and click the Jump to link in the search results.
3. Answer Yes to Did you have any self-employment income or expenses?
   • If you've already entered self-employment work and need to enter more, select Add another line of work.
4. Follow the onscreen instructions.

[edent508]

• Hi colleen thanks for your reply. To clarify I own season tickets for a popular sports team in the United States. I am allowed to list them for resale through Ticket Masters online portal. In may 2020, i listed about 400$ worth of tickets (my cost) that sold for nearly $2500. Of course i would normally report a profit of 2100 on my tax return as I have in prior years. This year however ticketmaster withheld the proceeds as the season was in doubt. In july it was announced that there would be no fans in attendance so the sales were voided. So i didn't actually get paid anything. My 1099k however still lists 2500$. I am not sure how to notate that the sale was cancelled so therefore i had no gains.

[KathrynG3 · Accepted solution]

There are two ways to report the expense to offset the income from Form 1099-K. 

If you are reporting it as self-employment income, record the cancellation under the Income option Rebates & Refunds.

If you are reporting Form 1099-K as other income, report it and then report the offsetting negative amount by following these steps:

1. From the left menu, go to Federal and select the first tab, Wages & Income.
2. Add more income by scrolling down to the last option, Less Common Income, and Show more.
3. Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start.
4. Choose the last option, Other reportable income and Start and Yes.
5. Enter the applicable description and amount and Continue.
   • First, enter Form 1099-K as received. It is essential that the full amount be entered.
     • For a description, include Form 1099-K and Personal Ticket Re-Sale.
   • Next, enter an adjustment to reflect the cost of these items as an offsetting, negative amount up to the amount of the income. 
     • For the cost description, include Cost of Personal Ticket and Cancelled Personal Ticket Re-Sale due to Covid-19.