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Greetings my fellow goons. Honestly, I already know what I am about to share sounds crazy... I recently invested my life savings into a video game with a real cash economy and purchased virtual land. I purchased a land area in Entropia Universe for $18,000 on March 21. I was scared and nervous to do something like this but I have wanted land in Entropia since 2006 when I was a teenager. Well, the thing is that so far the investment is doing better than I thought it would in the first month. I had thought it would take far longer for a real measure of success but it seems if I keep this up the land may potentially pay itself off in 3-4 years. That is like an insane 20-30% ROI right? I realize I may be counting my eggs before they hatch, but I thought it best to ask things like this now. What I am curious to know is that if I need to declare myself as a real business with an income like this or that I even should. So far I don't plan on taking any of the money out of game until I can do it in amounts around $4,000. The income is going to sit and build unless it would be smarter to withdraw it in smaller amounts. Is there a penalty or tax reason that I should withdraw it smaller? Will a $4,000 withdraw from a game into my account get me a red flag on taxes? I can prove where I put the original money into the game if the government requires that. The other thing I was curious about is if I should form it into a business, what may be the benefits and negatives and what type if I should? I am guessing I would have to list the business as real estate even though it is virtual? Would there be a way to get tax a tax write off for expenses regarding my land? Would I be able to write off any of the costs of internet or in game costs of managing the land with events and payments to players? Thank you for your time reading this long post. I look forward to any advice y'all can give!
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Apr 22, 2022 11:23
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| # ? May 1, 2024 01:00 |
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Justinen posted:I had thought it would take far longer for a real measure of success but it seems if I keep this up the land may potentially pay itself off in 3-4 years. That is like an insane 20-30% ROI right? Justinen posted:The income is going to sit and build unless it would be smarter to withdraw it in smaller amounts. Is there a penalty or tax reason that I should withdraw it smaller? Will a $4,000 withdraw from a game into my account get me a red flag on taxes? For individual taxpayers, capital gain on investments is taxed at the ordinary rate if the investment was held less than a year, and at the lower capital gain rate if held at least a year. In deciding when to sell land, you would want to consider the different tax rates as well as the bracket structure of each. Withdrawal fees occur separately from sale transactions, so you cannot count them against the gain. Even though entropias exchange with dollars at a fixed rate, they are a virtual currency and you would have to check the box on Form 1040. Creating a legal entity might help you capture expenses like withdrawal fees, but I'm not an expert in that area. It's not a real estate business. Gazpacho fucked around with this message at 16:25 on Apr 22, 2022 |
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Apr 22, 2022 16:10
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The land I own generates income daily based on the player activity. It isn't a piece of land that is resold for value, rather held onto and managed like a business. There will be a steady income of about $300-600 every month and I wasn't sure how to declare that on taxes. I appreciate your response!
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Apr 23, 2022 17:30
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source your quotes
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Oct 13, 2022 03:55
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gently caress off gurf
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Oct 13, 2022 04:31
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Please give us a 6 month update. I am curious to know exactly how sideways this adventure in rent-seeking went.
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Oct 13, 2022 04:47
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Justinen posted:The land I own generates income daily based on the player activity. It isn't a piece of land that is resold for value, rather held onto and managed like a business. There will be a steady income of about $300-600 every month and I wasn't sure how to declare that on taxes. I appreciate your response! Yeah that’s just regular income - if they send you a tax document, use that - would … a 1099-DIV be appropriate? Kind of! Edit: no not at all once I read more about the game. I have no idea what they’d send you if anything. If they don’t send you any tax documents, you might want to put it on your 1040 schedule 1, line 3. If you don’t consider it a business, but rather a hobby (like if you play the game for fun and the money is totally ancillary), uh… schedule 1, line 8i? Either way it just adds to your total income and you pay your regular marginal tax rate on that. But, the main reason I’m here is to say that there’s no way you’re going to make that money back and you should try to claw back as much as you can right now. if someone is offering you double digit percentage returns and you don’t have to do anything except give ‘em thousands of dollars up front… No way, man. Come on. SolTerrasa fucked around with this message at 06:25 on Oct 13, 2022 |
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Oct 13, 2022 06:22
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How can you lose money on a game named after entropy?
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Oct 13, 2022 08:20
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Justinen posted:The land I own generates income daily based on the player activity. It isn't a piece of land that is resold for value, rather held onto and managed like a business. There will be a steady income of about $300-600 every month and I wasn't sure how to declare that on taxes. I appreciate your response! that worked out, right? you didn't just hand over money to a con man, right?
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Oct 13, 2022 13:52
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Oct 13, 2022 17:27
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Tungsten posted:that worked out, right? you didn't just hand over money to a con man, right? How do you know the OP wasn't the con man?
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Oct 13, 2022 19:38
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qhat posted:How do you know the OP wasn't the con man? the con man gets money but the op spent money
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Oct 13, 2022 21:07
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SolTerrasa posted:the con man gets money but the op spent money Or so he claims.
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Oct 13, 2022 23:36
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Justinen posted:Any player who signs up under my link will start on my home planet of Arkadia (1 of the 6 unique planets) instead of somewhere else in the universe. I spend a vast majority of my play time on Arkadia and it will be easy for me to show you the ropes and whatnot.
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Oct 14, 2022 01:38
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the answer, o.p., is no. no to all. if it starts with "virtual" or "crypto," etc. it is not worth any money and it will not produce income. hth. oh sorry for bumping this lovely loving dead thread i didn't look when the last post was.
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Dec 4, 2022 00:47
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Doctor Dogballs posted:the answer, o.p., is no. no to all. if it starts with "virtual" or "crypto," etc. it is not worth any money and it will not produce income. hth. I would love an update on just how badly this went.
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Dec 4, 2022 02:46
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Sundae posted:I would love an update on just how badly this went. 
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Dec 4, 2022 20:46
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the lack of updates is an update in and of itself
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Dec 5, 2022 02:13
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