For football tickets, can I include a required contribution in the cost basis?

Forum|Forum|3 years ago
March 22, 2023
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I bought season college football tickets that I resold on Stubhub. There was a minimum contribution required to purchase them, which go to student scholarships.

I’m entering the sale as a capital gain. For the cost basis can I include this required contribution or does it go under donations instead?

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AnnetteB6

The required contribution amount should be deducted as a charitable contribution instead of being included in the basis of the cost of the ticket itself.

From my experience, the required contribution is only required depending on the location of your seats, so you have a choice of whether to contribute to the scholarship fund in order to acquire better seats. If that is not the case for you, then you would have an argument that the contribution is actually part of the basis of the cost of the tickets. Otherwise, the contribution should be treated as a contribution.

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Jello1Author

Thanks for your reply. That’s right the required contribution is only for designated seats. But I receive these specific seats as part of benefit being faculty so I don’t know if I have the option to downgrade.

In terms of charitable contribution, I found out from IRS Pub 526 that these type of “right to buy” donations aren’t deductible. That makes me wonder, shouldn’t it be allowed then to be used as a cost basis?

AnnetteB6

You are correct about the 'right to buy' donation not being deductible. I apologize for missing that point.

That does strengthen the case that the amount of the required donation could be added to the cost basis for the tickets since there is no chance of 'double-dipping' by deducting the donation amount.

Before including the full amount of the contribution as part of the cost basis, double-check any documentation you received from the college with regard to the required donation. A portion may be deductible if it was considered to be over and above the value of the benefit you received from making the donation. If that is true, it should be documented in a letter to you from the college.

@Jello1

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