Prices of tickets to Miami matches have skyrocketed from $30 to $255 since July, thanks to the addition of Messi to the Inter Miami team. However, fans who have been reselling these tickets for high prices may find themselves facing a tax bill from the IRS in 2024. As part of the Democrats’ American Rescue Plan Act, a new law will require ticketing exchange and resale companies like StubHub and Ticketmaster to provide information to the IRS on individuals who have sold more than $600 worth of tickets in a year.
The Biden administration recognizes the financial success of live events, where fans are willing to pay four-to-five figures to see top-selling artists or World Cup champions perform. StubHub has reported an unusually high number of ticket resellers for the “Eras Tour,” making up 70 percent of ticket orders, double the usual amount. The same trend can be seen for tickets to Inter Miami matches.
An example is Jon Steele, a Florida resident who resells his season tickets for Orlando City SC due to his busy work schedule. For a game against Inter Miami, he sold a pair of tickets for $1,100, which has already covered the cost of next year’s season tickets. While Steele is willing to pay his fair share of taxes, the new reporting law may require him to fill out a 1099-K form, typically reserved for those who earned over $20,000 in revenue and had more than 200 transactions in ticket resales.
The IRS’ new reporting law will be based on the sale price rather than the seller’s profit, making it harder to avoid reporting income from ticket resales. The law was initially expected to be implemented in 2022 but has been delayed until 2024. The House Ways and Means Committee has approved a bill that would reset the 1099-K threshold to $20,000, but its overall outcome remains uncertain. A bipartisan bill in the Senate suggests a threshold of $10,000 and 50 transactions.
The new law has substantial financial implications, with a Republican bill estimated to reduce federal revenue by $9.7 billion over a decade. The deadline for companies to send out 1099-K forms is January 31, and the IRS expects to receive 44 million forms in 2024, compared to 11.1 million in 2021.
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