Ticketmaster sales are considered taxable income in most cases. Whether you pay taxes on Ticketmaster sales depends on if you are selling the tickets as a business or as a private individual.
Quick Summary
- Ticket resales are generally taxable whether sold by a business or individual
- Businesses must report Ticketmaster sales as business income
- Individuals must report sales as capital gains if profit is over $600
- Ticketmaster does not automatically withhold taxes from sale payouts
- Sellers are responsible for calculating and paying applicable taxes
Are Ticketmaster sales taxable?
In most cases, income from selling tickets on Ticketmaster is considered taxable by the IRS and state tax authorities. This applies both to ticket brokers or businesses selling large volumes of tickets, as well as individuals selling an occasional ticket here and there.
For businesses, all income from Ticketmaster ticket resales is generally considered part of ordinary business income. As such, it is subject to being taxed at the business’s ordinary income tax rate.
For individuals, Ticketmaster income beyond a certain threshold is typically considered a capital gain. Capital gains under $600 per year do not need to be reported in most cases. However, any profits above $600 from Ticketmaster sales within a tax year should be reported as capital gains income.
What if I only sell a few tickets?
Even if you only sell tickets occasionally as an individual, the income is still generally taxable if it exceeds $600 profit in a tax year. The frequency of sales does not necessarily matter – it is the total dollar amount of capital gains profit from the ticket sales that determines whether taxes need to be paid.
For example, say you purchased 4 tickets for a concert this year for $200 each. Your cost basis for the 4 tickets then is $800 total. Later, you sold the tickets on Ticketmaster for $300 each, earning $1,200 total. So your capital gain profit would be $1,200 – $800 = $400. Since this exceeds the $600 capital gains threshold, you would need to report the $400 as taxable capital gains income, even though it was only from 4 tickets.
How ticket resale profits are taxed
How ticket resale profits are taxed depends on whether the sales are being conducted by a registered business or by an individual.
Businesses
For official businesses selling tickets, all income from Ticketmaster sales is reported as taxable business income. This gets reported on the business’s income tax return (such as Schedule C for sole proprietorships or Form 1120 for corporations). The ticket sale profits are subject to the business’s ordinary income tax rate.
Individuals
For individuals selling tickets in a personal capacity, profits from Ticketmaster resales are usually taxed as capital gains. This means they are subject to capital gains tax rates, which are generally lower than ordinary income tax rates.
Capital gainsincome gets reported on Form 1040 Schedule D. Short-term capital gains on assets held less than one year are taxed as ordinary income. Long-term gains on assets held over one year are typically taxed at 0%, 15% or 20%, depending on the individual’s total taxable income.
Does Ticketmaster withhold taxes from sale payouts?
No, Ticketmaster does not automatically withhold or deduct any taxes when paying out ticket resale earnings to sellers. The full sale amount gets paid out directly to the seller’s payment method on file.
It is then solely the seller’s responsibility to properly calculate, report, and pay applicable capital gains or business income taxes on the Ticketmaster earnings when filing their tax return. If you made significant income reselling tickets, you may also need to pay estimated quarterly taxes on the profits.
How do you calculate taxes on Ticketmaster sales?
To calculate how much tax is owed on Ticketmaster resale income, you first need to determine your total capital gains or business income profit. From there, you can estimate tax based on your ordinary income or capital gains tax rate.
Calculate Total Profit
Add up the total payouts received from all Ticketmaster ticket sales within the tax year. Then subtract the original purchase price paid for all those tickets. The difference is your total profit.
For example:
- Total Ticketmaster payouts: $15,000
- Less: Original cost of tickets: $12,000
- Equals: Capital gain profit = $15,000 – $12,000 = $3,000
Estimate Tax Amount
If selling as an individual, look up your long-term capital gains tax rate based on your total taxable income and filing status for the year. Multiply your total capital gain profit by this rate to estimate tax owed.
If selling as a business, multiply net business income by your ordinary business income tax rate to estimate tax liability.
Be sure to also account for any state income taxes owed on the Ticketmaster earnings in most cases.
How to reduce taxes on Ticketmaster sales
If you are reselling significant volumes of tickets, there are some steps you can take to try and reduce taxes owed:
- Deduct legitimate business expenses – Costs like advertising, fees, travel, and supplies can reduce your net profit.
- Use a business entity structure – An LLC or S-Corp may provide more tax deductions.
- Contribute to tax-advantaged accounts – Putting earnings into retirement or HSA accounts can lower taxable income.
- Hold tickets over one year – Long-term capital gains have lower tax rates than short-term.
- offset gains with losses – If you sell some tickets at a loss, this can offset ones sold at a gain.
However, realize that ticket resale income is lawful so you cannot evade taxes owed on this income source. Consulting a tax professional can help you maximize write-offs and minimize taxes.
Frequently Asked Questions
Do I have to report if I only sell a couple tickets?
You generally do not have to report profits from occasional ticket sales if the total capital gain profit is under $600 for the tax year. If you make over $600 in ticket resale profit, it needs to be reported on Schedule D.
What if I sell at a loss – can I deduct it?
Yes, you can deduct any losses from Ticketmaster ticket resales. These deductions can be used to offset capital gains from other sources. Unused capital loss deductions can offset up to $3,000 of ordinary income.
What if I bought tickets as a gift – am I taxed?
If you originally bought tickets as a gift but end up reselling them, you still need to account for capital gains tax if profit exceeds $600. Since you did not pay for the tickets, your cost basis would be $0.
Does Ticketmaster report sales to the IRS?
Ticketmaster only reports sales to the IRS for sellers who exceed 200 transactions and $20,000 in gross sales per year. If you stay under these thresholds, your sales will not get reported directly.
Can I deduct the fees Ticketmaster charges?
Yes, any fees, commissions, or charges Ticketmaster deducts from your payouts can reduce your net profit and lower your taxable income.
Do I have to pay estimated taxes quarterly?
You generally need to pay estimated taxes quarterly if you expect to owe over $1,000 when filing your return. This may apply if you have high volumes of ticket sales. Failure to pay estimated taxes can result in underpayment penalties.
Reporting Ticketmaster Sales on Tax Returns
To properly report Ticketmaster ticket resales on your tax return, follow these steps:
Individuals
- Document total Ticketmaster payout amounts received
- Document original purchase costs for the tickets sold
- Calculate capital gain/loss for each sale
- Add up capital gains/losses from all sales
- Report short-term gains as ordinary income; long-term gains on Schedule D
- Pay applicable capital gains tax
Businesses
- Track all Ticketmaster sales payouts as business income
- Deduct eligible business expenses
- Report net income on Schedule C or Form 1120
- Pay income tax at your business’s tax rate
Be sure to maintain thorough records of your ticket purchases and sales. Consult an accountant or tax professional if you need help reporting this income source accurately.
Conclusion
In most cases, profits earned from reselling tickets on Ticketmaster will be subject to capital gains tax or ordinary income tax, depending on whether you are selling as an individual or business. Even occasional ticket sales can generate tax liability if profits exceed $600 in a tax year.
Ticketmaster itself will not withhold any taxes from sale payouts, so sellers are responsible for tracking income, deductions, profits, and estimating taxes owed. Careful recordkeeping and reporting is essential to stay compliant with IRS and state tax rules when earning income from ticket resales.
| Ticketmaster Sale Scenario | Tax Treatment |
|---|---|
| Individual selling fewer than 200 tickets, under $20,000 gross sales | Report capital gains over $600; not reported directly to IRS |
| Individual selling over 200 tickets or over $20,000 gross sales | Reported directly to IRS; capital gains rules apply |
| Registered business selling any volume of tickets | Report as taxable business income |
| Purchased tickets as gift, then resold at profit | Profit still taxable as capital gain |
| Sold at an overall capital loss for the year | Can deduct capital losses; offset other gains |
In summary, income from Ticketmaster ticket resales should not be ignored when filing your annual tax return. Most sellers will owe applicable capital gains taxes or ordinary income taxes on this income source. Keeping detailed records and staying compliant is key to avoiding interest and penalties for insufficient tax payment.
Related Resources
For further guidance on reporting income from Ticketmaster sales, refer to the following additional resources:
IRS Publications
- IRS Pub 544: Sales and Other Dispositions of Assets – Tax rules for calculating capital gains/losses
- IRS Pub 334: Tax Guide for Small Business – Details for reporting business income
- IRS Pub 505: Tax Withholding and Estimated Tax – Information on paying estimated quarterly taxes
Online Resources
- Ticketmaster Terms & Fees – Ticketmaster seller policies and fee information
- Bench Accounting Blog – Overview of tax rules for ticket resellers
- SeatGeek Tax Guide – Another primer on taxes for ticket brokers
Consulting with a tax professional is also recommended if you require guidance tailoring a tax strategy to your specific ticket sales activities and profits.
Accurately reporting Ticketmaster sales and paying any taxes owed helps ensure you stay compliant with IRS and state tax regulations. Though it may create an extra tax-time burden, properly accounting for this income source can avoid much larger penalties down the road if not addressed.
