1099K Season Tickets cost basis

[andrew732]

In light of the changes that in tax year 2022, individuals earning more than $600 on TPSO's must file a 1099-K, I have been contacted by Stubhub that my reselling of season tickets will likely trigger a 1099-K file. My question is that I'm selling these tickets at a heavy loss (due to COVID) and would like to see how I should best file this.

For argument's sake, let's say I bought these tickets at $80/ticket for each game (let's say there are 40 games a season). I attended 10 of them and sold the other 30. Because of COVID and lower demand, I can only sell these tickets at $40/game, and let's say Stubhub takes $5 in fees, so I only get a net payment of $35/game.

1) Stubhub says that it will file a 1099-K for me with the $40/game (payment, not including fees). However, I'm actually incurring a $45 loss per game! How do I file this so I can factor in the cost basis, if this is allowed?

2) Since this is only occurring due to the change for the 2022 tax season, if I am able to file this capital loss, can I manually file a 1099-K capital loss for 2021 tax season? Since the season has games in both 2021 and 2022, I have been incurring a capital loss of ~$600 for 2021 games alone. Stubhub did not auto-trigger a 1099-K for 2021 since the limit was $20k.

3) If I sold on both Ticketmaster and Stubhub, would I have to file 2 separate 1099-K forms?

Thank you for all the help!

[M-MTax]

You can't claim a loss on the sale of stuff held for personal use. 

[andrew732]

In this case, am I allowed to simply ignore the 1099K forms, since I'm not selling anything at a profit? It seems awfully similar to the Massachusetts cases when the limit was at $600, and a lot of people ran into similar issues when selling personal items at a loss. 

https://ttlc.intuit.com/community/retirement/discussion/confusion-about-1099-k-filing-with-ebay-at-a...

I'm scared of incorrectly filing something and would like to do everything correctly to not get audited.

[M-MTax]

Report it but don't claim a loss.

[andrew732]

Sorry, this is my first time dealing with anything related to any non-primary income tax. If I report it - not claiming it as a loss - would I still have to pay taxes on the amount Stubhub pays me? it seems odd since I'm operating at a loss - for the 30 games I sell, I'm buying them for $2400 and only selling them for $1200, receiving $1050 after fees. Do I need to pay more tax on this $1050, even though I paid well over that to buy it?

[Vanessa A]

Since the tickets were bought for personal use and then sold at a loss this would be similar to yard sale items and not included on your return. 

You should still hold onto the 1099-K and proof of cost of the tickets since the 1099-K was reported to the IRS.

A 1099-K is not directly reported on your return.

[andrew732]

Gotcha, so to be extremely clear: I would hold onto copies of the 1099-K forms from Ticketmaster and Stubhub (or whatever agencies me 1099-K forms), along with documented proof of the original cost of the tickets. On TurboTax, I will NOT enter or mention the 1099-K forms. 

Will this possibly increase my chance of an audit, since Stubhub has submitted a 1099-K form on my behalf and I did not enter it at all on my tax return? Is there some section that I can mention it, but not include it (i.e. a box I can check testifying I sold at a loss)?

[M-MTax]

It WILL increase your chances for an audit over NOT including it on your return. All you've got to do is report the sales price and then your cost as the same so there is no gain or loss. These tickets are capital assets and you have either capital gain or loss OR you sold at the same price you paid for them. If your 1099K shows you received $500 then report your cost as $500......you have no gain or loss BUT you'll have reported the total you got from the sale on your return so the IRS can't bust you for not reporting.

[andrew732]

Thank you so much for the help! This is more clear, and digging around it seems to follow the thread: https://ttlc.intuit.com/community/business-taxes/discussion/can-a-paypal-1099-k-for-garage-sale-type....

Is there a reason why I should report my cost as $500 (in your hypothetical example?) Why should I not report the full cost of $1000, and just expect no capital loss benefits (since it's a personal item)? Given that I did spend $1000, it feels weird to under-represent my cost (as long as I'm not expecting any money back).

[M-MTax]

YES you can do that BUT you have to be careful to tell Turbotax that this was a personal item and you can't claim the loss. 

[fwadams1]

I just want to make sure I understand correct reporting of tickets via stub hub. If I sell my tickets at a lose, I do not report the 1099K on my taxes but I save the 1099K and the proof of costs? Do I enter this information when I file my taxes on turbo tax?

[DawnC]

Generally, you do not need to report personal items you sell at a loss.   However, since you did receive the 1099-K and the IRS knows about it, you may want to enter an offsetting transaction set to report the transaction.   See this link for instructions.   Make sure your income (1099-K amount) and the basis amount (purchase price) are the same - you can't take the loss as these are personal items.    @fwadams1

[amykissangel]

Hi-jumping in as I’ve been searching for this type of info all week and you might be the genius to help me! 🙂

We sold 6 football game tickets this year for a total of $2,790 (after TicketMaster took their % cut.)

We will get a 1099 form from TicketMaster acknowledging our "gain" of $2,790.

My question is this: We didn't actually MAKE $2790. The tickets are $160 a piece, which we paid as season ticket holders.  So $960 of that is not a gain. Our GAIN is $1830.

So how does that work? Will we be taxed on the $1830 or the $2790? Do we have to produce proof we purchased the tickets first? Or are we just screwed because there's no way to show that on our taxes?

We use TurboTax because our taxes are super easy and don't have a tax person - otherwise I'd just ask them.

Thanks for any insight you have!

[rjs]

@amykissangel 

The Form 1099-K from Ticketmaster does not show "gain." It shows the gross amount that you received. You will enter the $2,790 that you received and the cost of $960. You will pay tax on the $1,830 actual gain or profit.

You don't send proof of the cost with your tax return, but you have to be able to show it if the IRS questions the cost that you reported. So keep the records of your ticket purchases for at least 3 years in case the IRS asks for it.

[Mike9241]

since you don't seem to be in the business of selling tickets, your report the proceeds and cost on schedule D/form 8949