In general, whether reselling tickets is legal is a question for state or provincial law. For example, in the state of Rhode Island, the maximum legal resale price is 10% over the face value plus $3. In New York, there is no cap, but if you buy and sell as a business (and not for personal use only), you must have a license from the state.
If you are a US person, then for tax purposes, you have taxable income if you sell anything for more than you paid for it, whether it is an entertainment ticket, a classic car, or a garage sale treasure. If you buy and sell regularly to make a profit, you report the income as business income and you can deduct ordinary and necessary expenses. If you do it occasionally, you can report the income as hobby income but you can't deduct expenses.
The question of legality raises a very interesting topic. Under US tax law, you can't deduct business expenses if they are for illegal purposes. For example, you can't deduct bribes and kickbacks as a business expense, even if the bribe gets you a good contract. So I think that raises an interesting audit issue--if you buy tickets and resell them for more than is legally allowed in your state (or you don't have a license, or you violate some other law), can you deduct your expenses? Probably not. It's certainly interesting to think about.
