Ticket scalping proceeds are always taxable
Legal. Illegal. It doesn't matter to the IRS; the tax man just wants his cut
It's the big day for New York and Kansas City baseball fans.
If you're among them and looking to pick up a ducat to see the Royals host the Mets at Kauffman Stadium tonight in the first game of the 2015 World Series, be prepared to pay. And be prepared to pay a lot more when the series moves to Citi Field in the Big Apple.
The hubby and I bought scalped tickets to a World Series game. The reseller actually wasn't asking too terribly much and did I mention it was to see a World Series game?!
Being a worrier by nature (damn that DNA!), I was sure that a City of Brotherly Love cop would swoop in and arrest us all. But nothing happened. We got the tickets, watched our Orioles beat the Phillies and considering we were in O's attire among a throng of rabid Philadelphia fans, had a generally good time. Did I mention our team won?
Not all resales are illegal: It's an urban myth that scalping tickets is universally against the law.
As Myles Kaufman recounts in "The Curious Case of U.S. Ticket Resale Laws," in many instances law enforcement has no problem with, or there's minimal regulation of, the buying and selling of tickets between individuals, either face-to-face outside a venue or, more commonly nowadays, online.
So check out what the rules are where you live or with the sports franchise whose tickets you are trying to resell and go ahead and if it's copacetic, make the deal.
But they are taxable: Just remember, though, that the Internal Revenue Service also has an interest.
If you sell your tickets for more than you paid, the difference between the price you paid and the amount you got when you resold is profit. Taxable profit.
If you’re in the business and buying and selling tickets, it’s ordinary income. And if it is your occupation, you might be able to deduct some related expenses to help lower your taxable income.
But what if you sale isn't, say, officially sanctioned by the powers that be? It doesn't matter.
The IRS isn't concerned about little things like legality when it comes to your income's source. Legal, illegal, it's all the same. And taxable. Remember, that's what landed Al Capone in Alactraz.
I know. Few ticket resellers, regardless of the legality of the activity in their jurisdiction, are going to tell the IRS about their event-related income.
But they should. It is, after all, the law. And if they do happen to get caught, they could pay a really big price.
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