I haven't been withdrawing from the game (yet), but in all my reading on this too being in the US, hobby income is the way to generally go for most. Depending on how you play, it could technically qualify as a business, but the spirit of lilmoo's bullets above basically boils down to whether you are really focusing on playing the game or running a profitable operation in the game. At least for me, a lot of the game stuff comes first, and when I do profit in relatively small amounts, it's secondary (though a nice perk).
I liken it to little old ladies that make quilts and sell them at churches, etc. They may come out a little ahead in the end (if they aren't outright donating them), but their main goal in making them generally isn't to profit, especially to the point of supplementing their income given the amount of time that goes in on a $/hour basis.
If I were consistently withdrawing most every year though due to profits, then I'd feel like I'd have to look a little more closely at the business reporting side. As it stands though, it's more like clearing out your hobby supplies once in a blue moon and maybe coming out ahead if that hobby got more popular. If I was instead reselling in-game regularly, then that's definitely more business-like too. Either way, the main thing is to make sure you're reporting income in some fashion rather than omitting it entirely.