A new law in the U.S. could mean that fans who have taken up the habit of making a quick buck from reselling tickets for hundreds of dollars to Inter Miami games or the Eras Tour will be taxed by the IRS in 2024.
A new law that’s part of the Democrats’ American Rescue Plan Act coronavirus relief package of early 2021 will require ticketing exchange and resale companies, such as StubHub and Ticketmaster, to provide information to the IRS on individuals who have sold more than $600 worth of tickets this year, according to The Wall Street Journal.
The Biden administration is aware of the exceptional fiscal year that live events have just come off the back of, considering the commonality that Swifties, MLS fans and Beyoncé stans have: paying a high price, which can easily reach four-to-five figures, to see two of the world’s best-selling artists and a World Cup champion perform live.
In particular, prices of tickets to Inter Miami matches surged to $255 a piece from $30 (an 11.76 increase) since Messi joined The Herons in July.
StubHub said that it’s platform has experienced an ‘unusually high number of fan ticket resellers’ this year, which has accounted for 70 percent of U.S. ‘Eras Tour’ ticket orders – double the amount of what the company normally overviews – The Journal reported. The same isn’t too different when it comes to selling tickets to watch Messi play.
THANKS, LEO: The IRS will tax individuals who’ve sold over $$600 worth of tickets this year
StubHub said ticket resells have account for 70 percent of U.S. ‘Eras Tour’ ticket order this year
Both, Florida resident Jon Steele and his wife are season ticket-holders to Orlando City SC, of the MLS, but have found themselves reselling their tickets to weeknight games lately due to their busy work schedules. Steele told The Journal that he tends to recover 60 percent to 100 of the cost of each tickets, usually about $35, but that also depends on the club’s opponent.
For the Lions’ next match against Inter Miami on Sunday, he sold a pair of tickets for $1,100, according to The Journal. Steele has already managed to pay for next year’s season tickets, all thanks to that sum and other profits made from weeknight games in the past.
The soccer fans admits to wanting to see Messi play, but ‘covering to cost of an entire season of tickets was too good to pass up,’ he told The Journal. ‘Have you seen how much groceries cost these days?’
Steele added that he has no problem with ‘giving Uncle Sam his fair share’ but that will most likely mean that he will have to fill out a 1099-K form, which used to only be filled out by users who had received over $20,000 in revenue and more than 200 transactions in ticket resales.
The IRS’ new reporting law requirement will be triggered by the sale price, not the seller’s profit, according to The Journal, which claims that the change ‘is meant to make it harder to avoid reporting income from such sales.’
The new law was expected to be carried out for tax year 2022, but the IRS halted its implementation until next year. Plans to grant an additional reprieve have yet to be announced by IRS commissioner Danny Werfel.
IRS commissioner Danny Werfel has yet to announce plans to grant an additional reprieve
The House Ways and Means Committee – spearheaded by a Republican majority – approved a bill earlier this year that would reset the 1099-K threshold to $20,000, according to The Journal.
But that’s only part of a broader initiative that hasn’t gained much momentum in the House, and whether it will have an outcome at all remains uncertain. A bipartisan bill introduced in the Senate would adjust the threshold to $10,000 and 50 transactions The Journal reported.
Transactions would be considered as short-term gains that would most likely be taxed at the ordinary federal income-tax rate, generally between 10 percent and 37 percent if a fan sold a ticket within a year of purchase. State income taxes also apply.
A lot of money is on the line, reported The Journal, as a Republican bill ‘would reduce federal revenue by $9.7 billion over a decade,’ according to the congressional Joint Committee on Taxation.
The deadline for companies to send out 1099-K forms is January 31 and the IRS estimates that it will receive 44million of them in 2024, compared to 11.1M in 2021.