With the rise of online ticket resale platforms like StubHub, many ticket sellers have questions about the tax implications of their ticket sales. StubHub serves as an online marketplace that allows users to buy and sell tickets for events. If you’ve ever sold tickets on StubHub, you may be wondering if those sales are considered taxable income by the IRS.
The short answer
Yes, income from selling tickets on StubHub is generally taxable. According to the IRS, you must report all income you receive from the sale of tickets on your tax return, unless the sales qualify for a specific exemption.
The long answer
Here is a more in-depth look at how ticket sales on StubHub are treated for tax purposes:
Ticket sales are taxable income
The IRS considers income from selling tickets to be the same as any other type of side income. This means that gains from ticket sales are subject to ordinary income tax rates. If you sell tickets as an individual, the income should be reported on Schedule C of your Form 1040. If you sell tickets through a business entity like an LLC, the income is reported on the business tax return.
Cost basis and capital gains
When calculating taxes on StubHub sales, you can deduct the original cost of acquiring the tickets from the sale price to determine your capital gain. For example, if you bought concert tickets for $100 each and sold them on StubHub for $200 each, your capital gain would be $100 per ticket. The cost basis is the original purchase price.
StubHub fees
StubHub charges various fees to sellers, such as a commission fee when tickets are sold. These fees can be deducted from your ticket sale income as business expenses. Be sure to maintain records of any fees paid to StubHub.
Reporting requirements
For each tax year, you will receive a Form 1099-K from StubHub if you exceed $20,000 in sales and 200 transactions. This form reports your gross sales. If you do not receive a 1099-K, you are still required to voluntarily report your StubHub income when you file your taxes.
Reselling tickets as a business
If you are engaged in the business of reselling tickets for profit, your activity is considered self-employment income. In that case, you would owe self-employment tax on your earnings in addition to income tax. The IRS considers factors like volume, frequency, and regularity of sales to determine if it qualifies as a business.
Casual sellers
Many people only sell event tickets they cannot use every once in a while. This kind of casual selling activity generally does not amount to a business. But even as a casual seller, you still must report the income on your tax return.
Using StubHub as a marketplace
StubHub serves as an online marketplace to connect buyers and sellers. So technically, StubHub is not the one purchasing or selling the tickets. The transactions take place between the individual buyers and sellers using StubHub as a facilitator. This means that individuals, not StubHub, are responsible for reporting and paying taxes on any ticket transactions.
Examples of taxable ticket sales
To further illustrate, here are some examples of taxable ticket sales on StubHub:
Selling tickets at a higher price
If you purchased concert tickets for $50 each and sold them on StubHub for $75 each, you would have to report the $25 profit per ticket as taxable income.
Selling tickets at a loss
Let’s say you bought sports tickets for $100 each but had to sell them for $75 each on StubHub. Even though you took a loss, the $75 sales price still counts as taxable income. However, you could deduct the $25 loss per ticket when calculating your capital gains.
Bartering tickets
Trading or bartering tickets in exchange for goods or services results in taxable income equal to the fair market value of the tickets.
Sellingfree promotional tickets
Even if you obtained tickets for free, selling them results in taxable income. For example, if you sold free promotional concert tickets for $50 each, you would have to report the $50 as income.
Giving away tickets
Giving away tickets as gifts or donations does not result in taxable income. Only the actual sale of tickets generates taxable income.
Types of events that have taxable ticket sales
You may have to pay taxes on income from reselling tickets to any type of event, including:
- Concerts
- Theater performances
- Sporting events
- Comedy shows
- Festivals
- Amusement parks
- Movies
- Cultural events
- Food and wine events
- Fan conventions
Again, casual sales of tickets for personal use are still reportable. Reselling tickets in volume at higher prices could constitute a taxable self-employment business.
How to report StubHub sales on your taxes
To properly report your StubHub ticket sales to the IRS, follow these steps when filing your tax return:
- Report gross ticket sale amounts on Schedule C (Form 1040) or your business tax return.
- Subtract StubHub fees and the cost basis of the tickets.
- The resulting capital gain gets reported as taxable income.
- Consider any applicable deductions for business expenses.
- Keep detailed records of your cost basis, sale prices, fees, expenses, etc.
- Review Form 1099-K from StubHub to help capture all taxable transactions.
- Pay any income and self-employment taxes owed on your ticket sale profits.
Reselling tickets as a business may require additional forms like Schedule SE (Form 1040). Consider working with a tax professional to ensure you comply with all IRS rules and regulations.
Exceptions to taxability of StubHub ticket sales
In some limited cases, income from StubHub ticket resales may not need to be reported:
- If the tickets are sold at or below face value, the IRS may consider the sales as non-taxable gifts.
- If the tickets are sold at a loss, the income may be non-taxable. However, you still need to report it and claim the loss.
- If you exchange the tickets for something of equal or lesser value, it may be considered a non-taxable trade. But the full fair market value of what you receive in trade still needs to be reported.
For exceptions like these, be sure to consult a tax expert to understand if and how they apply to your situation.
State taxes on StubHub ticket sales
In addition to federal taxes, you may owe state income taxes on your StubHub ticket sales. Most states treat StubHub sales just like federal taxes – as taxable income subject to the state’s income tax rate. Some key points on state tax compliance include:
- Report StubHub income on your state tax return just like your federal return.
- The taxability of sales depends on the state where you reside, not where the ticketed event takes place.
- Part-year residents have to allocate StubHub income based on dates of residency.
- State filing thresholds may be lower than federal, so you may have to report StubHub income even if you don’t meet federal filing requirements.
- Some local jurisdictions also impose income taxes on ticket sales.
To avoid headaches, carefully review tax laws in your state of residence to factor in any taxes owed on StubHub income.
How StubHub reports sales to the IRS
As an online marketplace, StubHub facilitates sales between independent buyers and sellers. But StubHub itself has some tax reporting requirements too. Here is how StubHub handles tax reporting to the IRS:
- StubHub issues Form 1099-K to high-volume sellers with over $20,000 in gross sales and 200 transactions per year. This form reports the seller’s gross sales amount.
- StubHub files a copy of Form 1099-K with the IRS to report seller transactions.
- Low-volume sellers may not receive a 1099-K but still have to voluntarily report StubHub income.
- StubHub’s reporting responsibilities apply only to sellers, not buyers.
- StubHub may have additional tax reporting duties in certain state and local jurisdictions.
- In some cases, StubHub may withhold taxes from seller payouts.
So while individual sellers are mainly responsible for claiming StubHub income, the platform itself has tax obligations like issuing 1099-K forms.
Maximizing deductions on StubHub sales
There are certain costs related to reselling tickets on StubHub that you may be able to deduct on your taxes:
Expense | Potential deduction? |
---|---|
Original ticket purchase cost | Yes, as cost basis |
Credit card fees | Yes |
StubHub listing fees | Yes |
StubHub final value fees | Yes |
Other selling platform fees | Yes |
Mailing costs | Yes, if you have to mail tickets to buyers |
Office supplies | Possibly, if used for business purposes |
Internet and phone | Possibly, if used for business purposes |
Tickets purchased but not sold | No, these are personal expenses |
Be sure to maintain thorough records of any expenses you incur to support potential deductions. Proper documentation is key to maximizing write-offs and minimizing your tax liability.
Tax considerations for high-volume StubHub sellers
For users who resell a high volume of tickets on StubHub each year, there are some additional tax factors to keep in mind:
- Income from high-volume sales qualifies as self-employment income and requires paying 15.3% self-employment taxes in addition to income tax.
- You may need to make quarterly estimated tax payments on your StubHub earnings to avoid underpayment penalties.
- Consider forming a business entity like an LLC to formalize your reselling activities.
- Hiring accounting help is wise to ensure accurate filing and deductions as your volume increases.
- Keep meticulous records to avoid any suspicion of expenses not matching your sales levels.
Making significant income from StubHub sales requires extra planning and diligence to stay compliant and take advantage of all available write-offs.
Common mistakes
Here are some common mistakes to avoid when handling taxes on StubHub ticket sales:
- Not reporting income because you did not receive a Form 1099-K.
- Failing to report income from states you do not reside in.
- Not deducting StubHub fees and other eligible expenses.
- Failing to keep detailed records and documentation.
- Not making quarterly estimated payments on high earnings.
- Forgetting to account for state/local income taxes.
- Incorrectly reporting bartered or traded tickets.
- Misreporting profits as capital gains instead of ordinary income.
Mistakes like these could lead to IRS trouble, penalties, and excess taxes owed. If unsure, get help from a tax pro to avoid problems.
Getting help with reporting StubHub sales
If you need assistance handling taxes on StubHub ticket sales, here are some options:
- CPA or Enrolled Agent – Tax professionals can help accurately file your return and make deductions.
- Online filing tools – Self-preparation software can guide you through reporting StubHub income.
- IRS helplines – You can call the IRS directly with tax questions.
- StubHub support – Reach out to StubHub’s customer service for clarification on Form 1099-K.
- Tax attorney – For more complex tax situations, an attorney can provide counsel.
Reaching out for assistance with StubHub taxes can give you confidence you are meeting all reporting requirements while maximizing write-offs. Many tax professionals have experience specifically helping clients report income from sharing and gig platforms.
The bottom line
Ultimately, income earned from reselling tickets on StubHub is generally taxable at both the federal and state levels. The good news is that costs like the price you paid for tickets can help offset some of the tax burden. Keep detailed records, follow IRS instructions, and request help from a tax pro when needed to ensure you properly account for StubHub sales.