How do I report cost basis for concert tickets I resold for profit on tax return?

You'll need to report both the income (which the IRS knows about via the 1099-K) and your cost basis (what you paid for the tickets) on Schedule C or Schedule 1, depending on whether this is considered a hobby or business activity. The $600 threshold you're referring to is actually different from what applies here. The 1099-K reporting threshold used to be $20,000, then was supposed to be $600, but for 2023 taxes (filed in 2024) the IRS set it at $5,000. Since your sale exceeded that amount, the platform reported it to the IRS. For reporting your expenses, you'd include the original cost of tickets as an expense on the same form where you report the income. This will offset the income so you're only taxed on the actual profit of $420.

I went through something similar last year! I found using https://taxr.ai really helpful for figuring out where to report everything properly. I had a 1099-K from StubHub for tickets I resold, and I was totally confused about where to put my costs. The site analyzed my situation and walked me through exactly how to handle it in TurboTax - showed me I needed to use Schedule C and where to enter both the income and my expenses for the original ticket purchase. What made it really useful was that it addressed my specific situation rather than generic advice that didn't quite fit my case. The tool helped me understand how to properly document everything so I wouldn't have issues later.

Just wanted to update that I tried taxr.ai after seeing the recommendation here and it was exactly what I needed. I was about to report all $7,800 from my ticket sales as income when the site helped me realize I could document my original purchases of $7,400 as my cost basis. The step-by-step guidance showed me exactly which forms to use and where to enter everything in TurboTax. What I really appreciated was the explanation about whether this counted as a hobby vs. business activity based on my specific situation. Since I only sold these tickets because I couldn't attend the concert (not because I was trying to flip them for profit originally), it confirmed I should use Schedule 1 rather than Schedule C. Definitely saved me from overpaying!

If you're struggling with getting through to the IRS for clarification on this issue, I highly recommend https://claimyr.com - you can see how it works here: https://youtu.be/_kiP6q8DX5c. I spent literally hours on hold trying to get answers about properly reporting my 1099-K income versus actual profit, and Claimyr got me connected to an IRS agent in about 15 minutes. The agent confirmed that for occasional ticket resales, you report the full 1099-K amount as income and then offset it with the purchase price as an expense. She also explained how to document everything properly to avoid triggering an audit. Was completely worth it after wasting an entire afternoon trying to get through on my own.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it anyway since I was desperate for answers about my 1099-K situation with ticket sales. The service actually worked exactly as described - I got a call back connecting me to an IRS agent in about 20 minutes. The agent walked me through exactly how to report my ticket sales on my tax return. She explained that I need to report the full amount from the 1099-K on Schedule 1, Line 8z (Other Income) and then subtract my purchase cost on Schedule 1, Line 24a (Other Adjustments). This way I'm only taxed on my actual profit. She also recommended keeping documentation of my original purchase in case of questions later. Totally worth it rather than spending another day trying to get through on my own!

One thing to consider is that if you regularly buy and sell tickets for profit, the IRS might consider this a business rather than a hobby, especially if you do it with the intent to make money. In that case, you'd definitely need to file Schedule C and potentially pay self-employment tax. But for a one-time sale where you made less than $600 profit, it's more likely considered a hobby or casual sale. Just make sure you can document your original purchase price with receipts or credit card statements in case you're ever questioned about it.

Has anyone dealt with this in a state that also has income tax? I'm in California and wondering if I need to report this on my state return too or just federal?

I had a similar situation last year with selling Taylor Swift tickets I couldn't use. What really helped me was understanding that the 1099-K is just informational - it tells the IRS you received money, but it doesn't tell them your profit or loss. In TurboTax, I reported the full sale amount as "Other Income" and then entered my original purchase price as a deduction. The key is keeping good records of what you originally paid. I used my credit card statement and the original Ticketmaster confirmation email as documentation. Since you only made $420 profit on a one-time sale, this is definitely hobby income rather than business income. You won't owe self-employment tax, just regular income tax on that $420 profit. Make sure to save all your documentation - the IRS may ask for proof of your cost basis if they have questions about the difference between your 1099-K amount and what you're reporting as taxable income.

I just went through this exact situation with concert tickets I resold! The key thing to understand is that the 1099-K doesn't mean you owe taxes on the full amount - it's just the platform reporting what you received. For a one-time sale like yours, you'll want to report this as hobby income on Schedule 1 (Form 1040). Report the full $9,215 as "Other Income" on line 8z, then you can deduct your original purchase cost ($8,795 based on your $420 profit) on line 24a as "Other Adjustments to Income." This way you're only paying tax on your actual $420 profit, not the full sale amount. Make sure to keep documentation of your original purchase - email confirmations, credit card statements, anything that shows what you actually paid for those tickets originally. Since this was clearly a one-time thing and not a business venture, Schedule 1 is definitely the right approach rather than Schedule C. The IRS understands that people sometimes sell tickets they can't use - they just want to make sure you're reporting the actual profit correctly.

Just wanted to chime in as someone who's been through this exact scenario! I resold some Broadway tickets last year after getting a 1099-K and was completely panicked about how to handle it properly. The advice about using Schedule 1 is spot on for occasional sales like yours. What really helped me was organizing all my documentation upfront - I created a simple spreadsheet showing the original purchase date, amount paid, sale date, and sale amount. This made it super easy to see my actual profit and have everything ready if needed later. One thing I'd add is to double-check that your math is right on the $420 profit. Sometimes fees from the selling platform aren't immediately obvious, and you might be able to deduct those too as part of your cost basis. For example, if you paid any listing fees or seller fees to the platform, those could potentially reduce your taxable profit even further. The key thing to remember is that the IRS gets that 1099-K too, so they know you received the money. By properly reporting both the income AND your costs, you're showing them the full picture and only paying tax on what you actually gained. Keep those receipts safe - digital copies work perfectly fine!