Why the IRS Wants to Know About Your Eras Tour Tickets
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What is the main topic discussed in this episode?
This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
Here's your money briefing for Tuesday, October 3rd. I'm Arianna Esperu for The Wall Street Journal, filling in for J.R. Whelan. This year, people have been paying hundreds or sometimes thousands of dollars for event tickets. Whether it's to see Lionel Messi fresh off of his World Cup win or a three-hour-long Taylor Swift show, people were buying and reselling these tickets at a high price. Not me. I held on tight to my Swift tickets.
Wow.
What new IRS reporting rule could affect people who resold concert tickets in 2023?
And while high prices and a little embarrassment clearly didn't sway me to sell, the idea of making a profit on these tickets tempted many fans to sell their seats. But a new tax law could mean a different kind of surprise song for anyone who took in more than $600 a year from reselling tickets.
To be clear, if you've sold a ticket and profited any amount in the past, that technically always has been considered taxable income that you're supposed to report to the IRS. But what we're seeing now with these changes is that it's going to be a lot harder to kind of skate through with those. The IRS wants to capture that income and that revenue.
We'll talk to Wall Street Journal music industry reporter Anne Steele about the ins and outs of the law ahead of tax season. That's after the break.
This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
After a booming year for live events, a new tax law could impact people who resold their tickets at a hefty price. Wall Street Journal music industry reporter Anne Steele joins me. So Anne, for people trying to see big names like Taylor Swift, Beyonce, or Lionel Messi, what was it like trying to buy a ticket?
How high did resale prices climb for Taylor Swift, Beyoncé and Lionel Messi tickets?
These were the hottest tickets with the highest demand this year. So these were really, really tough tickets to get. And if you did get them, you were likely paying a huge markup on the secondary market for these shows and games. The average price for a Taylor Swift Heiress Tour ticket on StubHub was over $1,000 and really the best seats were going for multiple thousands of dollars. People were paying $2,000 for nosebleeds by the time this tour really got going and it became just this cultural touchstone event. The average for Beyonce was $380, $400 for Harry Styles. And after Messi joined the MLS, the price of tickets to inter-Miami matches shot up to $255. Previously, I think the average was like $30.
So significant markup.
Yeah. These ticket prices are through the roof. What's driving these big prices?
This is just good old supply and demand. There is just not enough of Taylor Swift to do enough shows to accommodate all of the people who want to go and see her.
Why did ticket scarcity and post-pandemic demand drive secondary-market markups?
So that just increases the value of those tickets. So we are just seeing so much demand for these shows, especially after the pandemic. People are ready. They have been ready to come out and see their favorite acts again on the road, and they're willing to shell out for it. And a lot of those are the price for resale tickets, correct? Yeah, so if you were a lucky fan who scored six face value tickets to the ARIS tour, maybe you kept three or four tickets, you went with your best friends, and maybe you sold the others and covered the cost of not only those tickets but some merch for yourself. And if you're a season ticket holder to an MLS team, you could sell those seats for when Messi came to town and essentially recoup the cost of an entire season.
So selling these super high value tickets just became very attractive and often too good a prospect to pass up for some fans this year.
And so this new tax law we're talking about is specifically targeting people who sold these tickets.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:55
2
What new IRS reporting rule could affect people who resold concert tickets in 2023?
0:55–2:27
3
How high did resale prices climb for Taylor Swift, Beyoncé and Lionel Messi tickets?
2:27–3:35
4
Why did ticket scarcity and post-pandemic demand drive secondary-market markups?
3:35–5:44
5
How did the $600 reporting threshold replace the old $20,000 rule for ticket platforms?
5:44–7:00
6
Which other gig-economy and payment platforms will be impacted by the lowered threshold?
7:00–8:09
7
What happens if you receive a 1099-K after selling tickets at a loss or small profit?
8:09–9:06
8
What should sellers do to prepare for tax season and avoid surprises from new reporting?
9:06–9:50
Speakers
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