Form 1099-NEC

[Dimitrios Paskoudniakis]

I was planning to attend a concert but got sick, so sold the tickets using an online ticket resale service. That company now insists they need to send me a 1099-NEC form as the amount was over $600, and in order to do so I need to update my account with my SSN.

I didn't make a profit, I exchanged tickets that have intrinsic value for cash. In fact I sold for below face value. However, if I receive this form it would suggest I need to declare the sale price as income.

This has nothing to do with my income which is otherwise on Form W-2.

Should I submit my SSN, receive the 1099-NEC, then fill out Schedule C to offset the sale proceeds by the amount I paid for the tickets? Or should I just ignore this ticket company? If they're suggesting I need to declare the ticket sale proceeds as income and I sold at a loss, can I deduct the net loss?

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>

[ira smilovitz]

On Wednesday, July 20, 2022 at 2:32:01 AM UTC-4, Dimitrios Paskoudniakis wrote:
> I was planning to attend a concert but got sick, so sold the tickets using an online ticket resale service. That company now insists they need to send me a 1099-NEC form as the amount was over $600, and in order to do so I need to update my account with my SSN.
>
> I didn't make a profit, I exchanged tickets that have intrinsic value for cash. In fact I sold for below face value. However, if I receive this form it would suggest I need to declare the sale price as income.
>
> This has nothing to do with my income which is otherwise on Form W-2.
>
> Should I submit my SSN, receive the 1099-NEC, then fill out Schedule C to offset the sale proceeds by the amount I paid for the tickets? Or should I just ignore this ticket company? If they're suggesting I need to declare the ticket sale proceeds as income and I sold at a loss, can I deduct the net loss?
>
> --

If the resale service says they need to issue a 1099-NEC, they're wrong. They didn't pay you for services you rendered to them. What they *do* have to issue is a 1099-K. Receipt of a 1099-K does not mean you have to report the income, but it does mean that the IRS could be looking for unreported income on your tax return.

In your situation, where you sold the tickets for a loss, there is no taxable income to report, and you can't claim the loss. If, on the other hand, you were buying and selling tickets on a regular basis with the intent of providing income, the sales would be reported on Schedule C.

While no one knows yet how the IRS will use the 1099-K information, a single transaction reported on a 1099-K is not likely to trigger any IRS action.

Ira Smilovitz, EA
Leonia, NJ