Selling tickets as a business in Canada
Some people “scalp” tickets—buying and selling them for a profit—as a business endeavour. If that is you, the income is taxed as business income, which is fully taxable at your marginal tax rate.
If you are buying and reselling tickets for profit, Allison, you must report the income as a sole proprietor on your personal tax return using Form T2125, Statement of Business or Professional Activities. If you are an incorporated business owner in the business of buying and selling tickets, you would report the corporation’s income on your T2 Corporation Income Tax Return.
If your sales exceed $30,000 in four consecutive calendar quarters, you may be required to register for and collect Goods and Services Tax (GST) or Harmonized Sales Tax (HST). The rate will depend on which province or territory you live in, and where you are buying and selling tickets. Some provinces also have provincial sales tax implications that may apply at different revenue thresholds.
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Selling tickets purchased for personal use
If the concert tickets were meant for you to use, Allison, and you simply decided to sell them, the tax implications are different. This would not represent a business where you bought the tickets in pursuit of a profit. It just so happens you probably earned a decent profit given the high demand for Taylor Swift tickets.
Things you buy primarily for your own enjoyment are considered “personal-use property” in the eyes of the Canada Revenue Agency (CRA). When you sell personal-use property, you generally sell it for less than you bought it for originally. There can be exceptions for items like rare coins, collectible baseball cards or a classic car. For personal-use property sold for a profit, including concert tickets, there are three rules that determine if tax applies.
According to the CRA:
- If the adjusted cost base (ACB) of the property is less than $1,000, its ACB is considered to be $1,000.
- If the proceeds of disposition (the sale price) are less than $1,000, the proceeds of disposition are considered to be $1,000.
- If both the ACB and the proceeds of disposition are $1,000 or less, you do not have a capital gain or a capital loss.
The CRA defines adjusted cost base as “the cost of a property plus any expenses to acquire it, such as commissions and legal fees.” If the ACB and proceeds were both less than $1,000, you do not have to report the transaction. But it is likely that many sellers of Taylor Swift tickets sold them for more than $1,000 or bought and sold for more than $1,000. They may need to report their profit on Schedule 3 of their tax return as a capital gain if their primary intention was to buy and sell for a profit or if the sale proceeds were more than $1,000.
When personal-use property is part of a set, with individual pieces that make up a whole, the $1,000 limit might apply to the set—for example, a series of sports cards or commemorative coins. This could also apply to a set of tickets that are sold together, but only if they are sold to the same person. So, if you had four tickets and sold two to one buyer and two to another unrelated buyer, you might get two $1,000 limits.
