Selling tickets as a business in Canada
Some people “scalp” tickets – buying and selling them for a profit – as a business enterprise. If that is you, the income can be taxed as business income, fully taxable at your marginal tax rate.
If you purchase and resell tickets for a profit, Allison, you should report the income as a sole proprietor in your personal tax return using Form T2125, Business or Professional Activities Statement. If you might be a registered business owner who buys and sells tickets, report the business’s income in your T2 income tax return.
If your sales exceed $30,000 for 4 consecutive calendar quarters, chances are you’ll be required to register and collect goods and services tax (GST) or harmonized sales tax (HST). The tariff is dependent upon which province or region you reside in and where you purchase and sell tickets. Some provinces even have provincial sales tax implications, which can apply at different sales thresholds.
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Sale of tickets purchased for private use
If the concert tickets were intended for you, Allison, and also you simply decided to sell them, the tax implications are different. This will not be a business where you obtain the tickets for profit. Coincidentally, given the high demand for Taylor Swift tickets, you almost certainly made a good profit.
Things you purchase primarily for your individual enjoyment are considered “personal use property” within the eyes of consumers. Canadian Revenue Agency (CRA). When you sell personal property, you usually sell it for lower than you originally bought it. There could also be exceptions for items resembling rare coins, baseball trading cards or a classic automobile. For personal use property sold for profit, including concert tickets, there are three rules that determine whether taxes apply.
According to CRA:
- If the property’s adjusted cost basis (ACB) is lower than $1,000, its ACB is taken into account to be $1,000.
- If the proceeds of sale (the selling price) are lower than $1,000, the proceeds of sale are considered to be $1,000.
- If each the ACB and sale proceeds are $1,000 or less, you’ve got neither a capital gain nor a capital loss.
The CRA defines adjusted cost basis as “the cost of a property plus any costs of acquiring it, such as commissions and legal fees.” If each the ACB and proceeds were lower than $1,000, you do not want to report the transaction. However, it is probably going that many sellers of Taylor Swift tickets have sold them for greater than $1,000 or have sold them for greater than $1,000. They may have to report their gain as a capital gain on Schedule 3 of their tax return if their primary intent was to purchase and sell for a profit or if the proceeds of the sale were greater than $1,000.
If personal use property is an element of a set and individual pieces form an entire, the $1,000 limit may apply to the set – for instance, a series of sports cards or commemorative coins. This could also apply to multiple tickets sold together, but only in the event that they are sold to the identical person. So in the event you had 4 tickets and sold two to at least one buyer and two to a different independent buyer, you possibly can get two $1,000 limits.
