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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 21, 2024 18:45 |
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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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